Westpac has announced it will close its home lending subsidiary RAMS as part of the banking and lending group’s portfolio simplification program.

The forthcoming closure of its subsidiary, acquired by Westpac back in 2008 and once one of Australia’s largest providers of residential home loans, comes after a strategic review of the business initiated last November by banking group.

“We have delivered considerable portfolio simplification over recent years, and after a thorough review, have decided that offering home loans through RAMS franchises is not right for Westpac,” said Damien MacRae, Westpac managing director mortgages.

Whilst issuing an immediate halt on new loan applications through RAMS, Westpac confirmed it will retain existing RAMS customers’ loans, as well as provide continued access to customer service portals, including its dedicated app, website and call centre.

RAMS’s current mortgage portfolio, totalling $31.8 billion, will now be absorbed into Westpac’s loan book.

MacRae added that the bank will continue to “help our customers, franchisees and our people through this process”.

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

Founded in 1991, RAMS, alongside Aussie Home Loans, was one of Australia’s largest non-bank residential lenders through the 1990s and early 2000s. RAMS was snapped up by Westpac in 2008 at the height of the global financial crisis in a challenging period for the business, which at the time had considerable exposure to the US investment market.

More recently, RAMS has come to the attention of ASIC and APRA, with the regulators uncovering potential breaches of responsible lending laws.

Westpac acknowledged in its 2024 half-year report that the business was under investigation regarding home loans issued between early 2019 and late 2023, with the regulators focused on RAMS’ “general conduct obligations, prohibitions on conducting business with unlicenced persons, and giving misleading information”.

Westpac at the time said the RAMS group had exited a number of franchises, with the group “considering strategic options in relation to the RAMS business”.

Westpac reportedly attempted to sell RAMS earlier this year as part of its business-wide simplification program, but was unsuccessful.