Pepper Money Limited (ASX: PPM) has emerged as a frontrunner in the race to acquire Westpac Banking Corporation’s (ASX: WBC) embattled RAMS home loan portfolio. The ASX-listed non-bank lender confirmed on 30 October 2025 that it is part of a consortium negotiating with the major bank over the potential acquisition.
The move could mark one of the largest non-bank acquisitions in recent Australian history.
RAMS Home Loans closed to new applications in August 2024.
A Multi-Billion Dollar Portfolio in Play
The RAMS mortgage portfolio stood at $31.8 billion as of 30 June 2024, according to Westpac’s financial results.
Previous sale attempts in 2024 were estimated to involve several billion dollars worth of home loans. While neither Pepper Money nor Westpac has disclosed the transaction value, the sheer size of the portfolio underscores the scale of the potential deal.
The non-bank lender stated:
“Pepper Money confirms that it is part of a consortium which is in negotiations with Westpac in relation to the potential transaction. The negotiations are preliminary and incomplete, and no agreement has been reached.”
RAMS: From Market Leader to Major Liability
RAMS once operated as a stand-alone business within Westpac Group following its $140 million acquisition in 2007.
The brand ran through independent franchisees and staff who offered RAMS-branded home loans primarily targeting:
- First home buyers
- Self-employed borrowers
- Low-documentation loan seekers
However, the franchise model unravelled spectacularly.
Compliance Failures and Court Penalties
In October 2025, the Federal Court ordered RAMS Financial Group to pay a $20 million penalty for systemic compliance failings between June 2019 and April 2023.
The court found RAMS breached its obligations as an Australian credit licensee by:
- Dealing with unlicensed referrers
- Failing to manage conflicts of interest adequately
- Failing to supervise representatives and enforce proper compliance policies
- Not ensuring credit activities were conducted efficiently, honestly, and fairly
The breaches included cases where franchise staff submitted falsified payslips or altered customer financial details to push loan applications through.
Brand Closure and Legal Battles
Westpac shut down RAMS to new home loan applications in August 2024, though existing customers continue to be serviced.
The closure triggered a class action lawsuit filed in May 2024 by former franchisees who alleged that Westpac unjustly terminated their contracts. The franchisees claim the group breached its contractual and statutory duty of good faith.
Why Pepper Money Wants In
Despite RAMS’ troubled history, the portfolio represents a significant opportunity for Pepper Money.
Pepper Money, one of Australia’s largest non-bank lenders which recently celebrated its 25th anniversary, has been expanding its loan servicing and asset acquisition capabilities.
The company’s current market capitalisation sits at approximately $961 million. The RAMS acquisition would dramatically expand its mortgage book and consolidate its position in the specialist lending market.
Pepper Money Share Price Chart
Strategic Fit
A successful acquisition would provide Pepper Money with:
- An established $31.8 billion mortgage portfolio
- Immediate scale in the mortgage servicing sector
- A customer base with existing relationships
- Potential cross-selling opportunities across Pepper’s product range
The non-bank lender specialises in flexible loans for:
- Self-employed borrowers
- Customers with low credit scores
- Non-standard income verification scenarios
This aligns well with RAMS’ historical customer base.
Westpac’s Exit Strategy
For Westpac, the potential sale represents another step in its ongoing portfolio simplification strategy.
The bank has previously divested from:
- Wealth management operations
- General insurance
- Lenders mortgage insurance
- Auto finance
Managing Director of Mortgages Damien MacRae stated in August 2024:
“We have delivered considerable portfolio simplification over recent years, and after a thorough review, have decided that offering home loans through RAMS franchisees is not right for Westpac.”
The bank will retain existing RAMS customers and continue servicing their loans while the sale discussions progress.
What Happens Next?
The negotiations remain in preliminary stages with no certainty that an agreement will be reached.
Key outstanding questions include:
- The final purchase price
- Identity of other consortium partners
- Timeline for completion
- Regulatory approvals required
- Treatment of existing staff and franchisees
Neither party has disclosed the timeline for completing negotiations or finalising any potential transaction.
Also Read: Woolworths Faces Reality Check as First Quarter Sales Fall Short Despite Growth
Market Implications
If the acquisition proceeds, it would mark the final chapter in Westpac’s RAMS saga and could reshape Australia’s non-bank lending landscape.
The transaction would demonstrate continued appetite among specialist lenders and institutional investors for established mortgage portfolios, even those with compliance issues.
For Australia’s broader mortgage market, the deal could signal increased competition as non-bank lenders expand their footprint against the Big Four banks, Commonwealth Bank, Westpac, NAB, and ANZ.
