Posts Tagged ‘Adelaide Bank’

How dodgy is Adelaide Bank’s lending practice?

Wednesday, August 13th, 2008

Yesterday, in The dark side of rising bank profits, we reported on the profit surge of Bendigo-Adelaide Bank’s profit surge. One of our readers know something about Adelaide Bank better than us and has kindly let us publish his/her story:

A friend of mine has been working for Adelaide Bank the past few years. In 2003 we had a conversation about loan standards and what he said shocked me. He worked in the business/commercial loan department of the bank approving loans over 1.5m in size. He said that they only checked the documents visually when an application came in. No other due diligence was made apart from the credit check.

He said that people would send in obviously doctored tax statements, some even dodgied up on a home computer, but they would still be approved.

Remember this was in 2003. Now we can start to understand how that guy from Perth, Mr ?Richie Sambora?, was able to make such large multi million dollar commercial loans. As long as the numbers looked right and matched up to what you wanted to purchase, Banks like AB would approve it.

When Bendigo Bank bought Adelaide bank there were a few articles in the mainstream press lambasting the move based on the fact the AB loan pool is the most riskiest and low quality. When the tide goes out, and commercial loans start defaulting Bendigo Bank will regret their purchase.

As an aside, I remember in 2005 the majority of Adelaide used car yards would recommend Adelaide Bank as the fastest and easiest way to get finance. It was basically on the same day you could get approved, with only a credit check and no other documentation needed.

P.S. Please note that this is an unverified story. Read it with a grain of salt.