Bank branches still alive says mortgage newcomer

By KEVIN TAYLOR

Mark Bouris is a fan of bricks and mortar in banking - but only if it is rented.

Bouris, the executive chairman of financial services company Wizard Mortgage Corporation, said the bank branch was still very much alive.

The Australian said the departure of branch-less direct banker AMP Banking from New Zealand and the rise of his company and Kiwibank showed the branch was far from dead.

Wizard plans to open five more branches next month to add to the 12 it already has dotted around the country.

Bouris expanded Wizard into New Zealand in March 2000 and already has a $180 million mortgage book, which he said was bigger than Kiwibank.

He also runs Australian Mortgage Securities, which has a mortgage book of about $500 million in New Zealand.

Two of the new branches will be in Auckland, including one for Asian customers, two in the Wellington region, and one in Christchurch.

Bouris said the New Zealand market had huge potential for Wizard. "I'm not saying it is going to grow at 20 per cent per annum, but in terms of getting market share I think there is plenty of opportunity, particularly given the non-conforming territory."

Wizard offers both traditional home loans and "non-conforming" loans for those not meeting normal mortgage criteria.

But Bouris said he saw big opportunities for traditional home loans in New Zealand, which was where the push for business was coming from.

He said the branch system failed the banks because they were high-cost. The banks owned the real estate, there was always a lot of it, and it was on main streets.

Wizard's approach was to rent small, simple, open offices away from the main street. Branches were "well and truly back", he said.

In Australia, ANZ and Westpac were reopening branches.

Three years ago they were closing them.

Bouris said branches were axed because it was thought internet banking would take over.

"Well, that's been a dismal failure. It is good for servicing business but it does not get you business."

In March, Bouris published a book called Wealth Wizard: How to Use Debt for Wealth and Security, providing tips on how people can use their mortgage to create wealth.