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Category: Banking / Housing

WA Government sells off $1.35b from Keystart loan book

Thursday, 29 Sep 2016 08:59:14 | Charlotte Hamlyn

Treasurer Mike Nahan said the Keystart sale would significantly boost WA's finances. (ABC News: Andrew O'Connor)

The State Government has sold off part of its Keystart loan book, raising $1.35 billion as part of its asset sales program, designed to slash debt.

Keystart is owned by the WA Housing Authority and provides loans to disadvantaged buyers who are unable to meet the deposit requirements of mainstream lenders.

The plan to divest up to 40 per cent of the loan book was set out in the May budget as part of the State Government's asset sales and debt reduction strategy.

Bendigo and Adelaide Bank has today been named the successful bidder.

Managing director Mike Hirst said the bank had taken on 6,000 of Keystart's 18,000 loans, but only those with a good repayment history.

"The customers in the portfolio we are acquiring have, on average, a track record of meeting their loan repayments for more than five years," Mr Hirst said.

"We will not be acquiring any loans that are more than one month in arrears."

That leaves the State Government responsible for those less attractive loans.

Nevertheless, WA Treasurer Mike Nahan said the sale provided a significant boost to state coffers.

"When finalised, this will mark the second transaction in the State Government's asset sales program and will achieve a reduction in gross debt," he said.

"This also represents an important step in ensuring a sustainable future for the home loan program by reducing its reliance on Government borrowings."

Keystart's total loan book is worth about $4 billion and makes up 18 per cent of the first homebuyer market in Western Australia.

AustraliaPlus


 

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