Westpac closes RAMS following strategic review Westpac is closing its RAMS home loan franchise business off to new loans following a strategic review exploring options including a failed attempt to sell the business.

Westpac purchased RAMS in 2007, a group that included 53 franchises and the brand name, for $140 million, providing the business with a much-needed $2 billion in funding. It came after a failed attempt by the RAMS group to list publicly as the US subprime mortgage crisis hit. It became the foundation for Westpac’s portfolio of brands play and came off the back of its approved merger with St George Bank. Last year, Westpac exited a number of businesses including general insurance, lenders mortgage insurance, and auto finance in Australia.

The news comes several months after Westpac put the business up for sale via Morgan Stanley. It also comes amidst a class action case launched in May in the Federal Court against RAMS Financial Group by Morris Mennilli lawyers led by former franchisee, Top Ryde Financial Services, alleging RAMS has breached its contractual and statutory duty of good faith by terminating franchise agreements without proper cause. Westpac has since noted it’s exited a number of franchises as part of the strategic review of options for RAMs.

There’s also ASIC scrutiny of RAMS centred around the provision of home loans between January 2019 and September 2023, plus APRA scrutiny of Westpac’s mortgage broking arm underway.

In an ASX statement, Westpac’s managing director of mortgages, Damien MacRae, said offering home loans via RAMS was no longer considered the right thing to do at Westpac.

“We have delivered considerable portfolio simplification over recent years and after a thorough review, have decided that offering home loans through RAMS franchisees is not right for Westpac,” he said.

The existing home loans for RAMS customers will remain in place and the Westpac portfolio is retaining the RAMS mortgage portfolio of loans. The group also said customers will also be able to continue accessing services through the RAMS app, website, and call centre and will be supported by Westpac on current mortgage applications.

“We are also providing franchisees with mutually agreed support and there will be ongoing opportunities for RAMS employees within Westpac,” MacRae said.

Westpac has said the decision will not have a material effect on its next financial results. Westpac valued its total RAMS book at $31.8 million, and the business currently has 36 franchises.

RAMS was established back in 1991 by John Kinghorn and was reportedly once the largest non-bank originator, funder and servicer of home loans in Australia.

A Westpac spokesperson confirmed there’s no timeframe on when the RAMS app, call centre, and website will eventually be either rebranded or consumed into Westpac’s broader offerings. “There’ll be no change for existing customers, who can continue to use these services,” the spokesperson said.

– with additional reporting by Nadia Cameron.