Thanks BoomerSorry I should add one more thought I have. I don't...

Thanks Boomer

Sorry I should add one more thought I have. I don't think they can grow at the same Net Interest Margin as their back book. This addresses your point about retaining the same revenue per dollar from new business as with old business.

I think that given their bank operates at a large structural cost advantage (31%) vs Major Banks (ANZ 53.8%, CBA 46.5%, WBC 44.6%, NAB 45.8%) and other regionals ie Bendigo (62%) - it would make sense for AMP to try ram this cost to income advantage home and grow at the expense of a bit of margin. Sure they would report weaker NIMs, but I think much higher profits and still decent returns on the capital employed in this initiative.

It would definitely be preferable if they could grow at the same, or higher NIMs, I just don't think it's realistic. At the end of the day, the capital that goes into a mortgage is nothing short of a commodity. Nobody cares who it comes from, just as long as its competitively priced and the application process is easy enough.