• Street Talk
  • Updated Aug 26 2016 at 10:54 AM

WA's Keystart loan book sale hit with further delays

Further delays plague the sale of 40 per cent of Keystart's loan book.
Further delays plague the sale of 40 per cent of Keystart's loan book. Gabriele Charotte

The West Australian government will miss a self-imposed August deadline to sell a stake in its Keystart loan portfolio. 

Street Talk understands an announcement on a winning bidder is still some weeks away. 

This column revealed that WA's treasurer Mike Nahan and housing minister Colin Holt were aiming for a deal signing and completion by the end of August.

Gresham Partners is managing the auction. 

The state government has already extended the deadline for final bids several times, after they were initially due on July 21. The process is looking fragile after lenders including Commonwealth Bank of Australia, Pepper Group and AFG pulled back from the auction. 

Up for grabs is 40 per cent, or $1.6 billion, of the $4 billion-plus mortgage book.

Bendigo and Adelaide Bank, which was outed by this column as a suitor in May. Macquarie Group is also keeping a keen eye on the Keystart sale. 

The sale structure - which deterred several potential buyers - outlined that Keystart would continue to manage the loan book and pricing would continue to be set at an average of the big four's standard variable mortgage rates.

The WA government established Keystart to provide low deposit and shared equity home loans to low-to-medium income earners unable to obtain finance from private lenders.