The chief executive of a big four bank has explained the group’s position on home lending, noting that “it’s more than just regulatory pressure” that's driving the major lender's mortgage strategy.
In an interview with BlueNotes managing editor Andrew Cornell, following the bank’s third-quarter trading update, ANZ CEO Shayne Elliott commented on the group’s 1.8x system growth in owner-occupied lending.
Mr Cornell asked the chief executive whether the regulatory-driven shift away from investor and towards owner-occupied mortgages was a "significant trend".
Mr Elliott replied: “Absolutely. In fact, it’s more than just the regulatory pressure, and we’ve said for some time, as a strategy, we want to be the best bank for people that want to buy and own a home.”
ANZ posted a cash profit of $1.79 billion, up by 5.3 per cent for the three months to 30 June. Mr Elliott highlighted that owner-occupied lending had played a significant role in driving growth for the bank.
“We’ve been growing our business in owner-occupied home loans much faster than the market and actually really reweighting our portfolio towards that and we’re really comfortable with that,” he said.
“The way we’re doing that is to just really focus on great product and distribution through our branch network.”
ANZ is in the process of transforming its business into a nimbler, more streamlined financial services organisation by divesting its wealth assets and ramping up the domestic retail business.
The change led fund manager and AFR columnist Christopher Joye to write earlier this month that the bank will look to reduce its reliance on brokers and branches in favour of a technology offering that uses predictive modelling and risk-based pricing.
However, ANZ responded to Mr Joye's comments, stating that “brokers remain a preferred channel for many customers and currently account for about 50 per cent of home lending/home loans by ANZ. It means brokers are a key distribution channel for ANZ now and in the future.”
ANZ is not alone in rethinking its model. Outgoing CBA boss Ian Narev commented last week that Australia’s biggest bank is eager to provide “a very compelling experience” to borrowers through its own channels, one “that will make our customers and other customers want to come to us and not through the broker channel.”
For the six months ending June 2017, brokers wrote just 38 per cent of new home loans for CBA, down from 46 per cent on the prior comparative period.
[Related: ANZ hikes rates by 30 basis points]