Westpac announced RAMS will not be taking new home loan applications, effective immediately.

Almost $32 billion in existing RAMS home loans will be absorbed into Westpac's lending book, with the big bank saying the move is part of a "strategic review".

Westpac's managing director for mortgages Damien MacRae said the bank had decided offering home loans through RAMS franchisees is "not right" for Westpac.

This follows the brand's move away from deposit products and other banking verticals. 

Troubled times for RAMS

Earlier this year, Westpac settled a class action taken by RAMS franchisees after the big bank tried unsuccessfully to sell off the business.

It was reported Westpac withdrew from shopping it around due to lack of interest.

The unsuccessful sale bid came amid ongoing ASIC and APRA investigations into whether RAMS breached credit rules, including responsible lending regulations, related to home loans issued over the past four years.

RAMS customer services continue

Westpac said existing RAMS loans would remain in place and customers could continue to access their usual services through the RAMS app, website, and call centre.

Westpac is now in the process of contacting current RAMS home loan applicants.

End of an era

The announcement will see the effective end of the RAMS business in Australia after 33 years.

At one time, RAMS was the largest non-bank home lender in Australia alongside Aussie Home Loans.

Westpac acquired the company after it came under pressure during the global financial crisis in 2007-2008.

Westpac said it was providing franchisees with "mutually agreed support" and stressed there will be ongoing opportunities for RAMS employees within Westpac.

Westpac revises rates cut forecast

In the wake of Tuesday's Reserve Bank of Australia board meeting, Westpac has also announced fears the central bank won't cut the cash rate "in time".

In a statement by Westpac chief economist Luci Ellis, previously an assistant governor of the RBA, Westpac said it is now reviewing its forecast of a cut in the cash rate in November.

Dr Ellis said the "surprisingly hawkish" tone of the RBA had prompted the review.

Westpac and CBA were the only two of the big four banks to stick with the forecast of a November rate cut.

The other two, NAB and ANZ, had pushed their forecasts out until 2025 - May and February respectively.

In the statement, Dr Ellis said while the RBA's forecasts for trimmed mean inflation were not materially different to Westpac's, its near-term headline inflation forecasts were a little higher.

She said while the expected decline in inflation sets up conditions to start scaling back the restrictiveness in monetary policy later this year, it was clear the RBA board doesn't expect that to occur soon.

In what could be perceived as dig at her old employer, Dr Ellis said the language used in the post-meeting media conference revealed the RBA board "is not yet thinking in a forward-looking manner".

However, communication tactics from the RBA have changed since then-Governor Dr Philip Lowe's repeated forward guidance that the central bank couldn't see rates moving upwards until 2024.

The Westpac statement said it was always going to be the case the RBA would be among the last of its central bank peers to cut rates, given it did not raise rates as far.

Dr Ellis said recent evolutions in the RBA's analytical framework and rhetoric increase the risk it will now not pivot in time.

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