Powered by MOMENTUM MEDIA
subscribe to our newsletter
Major banks report mixed results in broker space

Major banks report mixed results in broker space

Westpac and the Commonwealth Bank’s share of the third-party mortgage market has spiked, in contrast to sharp declines from NAB and ANZ, the latest AFG data has revealed.

According to the Australian Finance Group’s (AFG) latest Mortgage and Competition Index, which involved a survey of its broker network, the broker market share of the big four banks have headed in opposite directions.

Over the third quarter of 2019 (3Q19), Westpac and its subsidiaries (St. George Bank, Bank of Melbourne and Bank SA) reported the sharpest increase in market share among the big four banks, jumping by an aggregate of 21.1 per cent, from 18.9 per cent as at 31 December 2018 to 23 per cent.

Advertisement
Advertisement

The Commonwealth Bank of Australia (CBA) and its subsidiary Bankwest, also reported strong growth, with the group’s share rising by an aggregate of 11.2 per cent over the same period, from 20.4 per cent to 22.7 per cent.

Conversely, NAB and ANZ both recorded significant declines in their share of the third-party mortgage network.

NAB’s share of the market slipped by an aggregate of 32.5 per cent, from 7.5 per cent as at 31 December 2018 to 5.06 per cent, while ANZ’s market share dropped by an aggregate of 21.4 per cent, from 11.2 per cent to 8.8 per cent.

NAB’s current share of AFG’s broker network sits below that of CBA subsidiary Bankwest, and Westpac subsidiary St. George, who individually boasts higher market shares of 8.1 per cent and 5.6 per cent, respectively.

Bankwest’s performance was in line with new research from Momentum Intelligence’s Third-Party Lending Report, which involved a survey of over 1,000 mortgage brokers who voted Bankwest the highest rated ADI and the highest rated non-major bank.

The AFG index reported that, in total, the market share of the big four banks and their subsidiaries declined when compared to the previous corresponding period, with AFG brokers lodging 58.6 per cent of loans to the big four banks in 3Q19, down from 63.2 per cent in 3Q18.

Conversely, the market share of non-major banks increased from 38.6 per cent to 41.4 per cent over the same period.

Speaking on a Future of Broking panel hosted by ME Bank, the co-founder and managing director of Lendi, David Hyman, said that the shift in market share towards the non-majors was partly driven by their faster uptake of digital processes.

“Our customer base is more digitally native, we have quite a few more customers online than the offline channels,” he said.

“They are typically more receptive of some of the small lenders that have invested really heavily over the last five to 10 years in the digital platforms – lenders like ME, ING, Macquarie, etc. – where customers know they are going to get a great mobile app experience so they are more open to this.”

Mr Hyman added that the vast majority of home loans submitted by Lendi’s broker network are lodged with non-majors.

“Our broker share of the majors bucks the trend of the outstanding loan balance – 8/10 loans today are with the big four across the whole market, we fluctuate between 20-30 per cent of our loans land with a big four lender each month,” he said.

“The second side of that as well is because we are using technology that assists in the product selection and the lender selection process; the more lenders we have on our platform, the more likely we are going to be able to find a solution for a customer that is outside of the big four.”

[Related: Legislators cautioned as mortgage lodgements hit six-year low]

Major banks report mixed results in broker space
Westpac
mortgagebusiness

Charbel Kadib

Charbel Kadib is a journalist on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel held roles with public relations agency Fifty Acres, and the Department of Communications and the Arts.

Charbel graduated from the University of Notre Dame Australia with a Bachelor of Arts (Politics & Journalism).

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Latest News

APRA’s proposal to loosen serviceability measures could reignite the credit boom, Moody’s has said, amid growing expectations that the m...

The median time on market for a residential dwelling has almost doubled, reflecting subdued demand for housing amid falling property prices,...

NAB and Westpac are among the 56 banks to endorse the United Nations’ Principles for Responsible Banking that will be launched in Septembe...

FROM THE WEB
podcast

LATEST PODCAST: How the mortgage sector will be impacted by the federal election

Do you think the banking royal commission recommendations could negatively impact competition in the mortgage market?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.