Major banks maintain share of new loans

The Australian Bureau of Statistics (ABS) has revamped its Lending indicators data, sourced from the Economic and Financial Statistics collection.     

The ABS reported an increase in the value of new housing finance commitments in October, across both the owner-occupied and investor segments.

The data, which includes a breakdown of loan originations by lender type, revealed that the major banks maintained their share of the rise in loan commitments at 70.8 per cent (according to the proportion of original series data – i.e. including any movements due to seasonal or cyclical factors), in line with the previous month.

Accordingly, the non-major banks held their share of new home loan commitments at 24.6 per cent.  

When divided into borrower segment, however, the major banks grew market share in the owner-occupied space, with their proportion of new owner-occupied loans rising from 69.8 per cent in September to 70.1 per cent.

The big four banks’ share of new investment loans also increased, rising from 65.3 per cent to 68.5 per cent.

Meanwhile, the non-major banks’ share of new owner-occupied loans also increased, rising from 25.3 per cent to 25.6 per cent, but their share of new investment loans dropped from 20.4 per cent to 20.3 per cent.  

This comes despite concerns among major banks about their position in the home loan market.

Last month, NAB chair Philip Chronican told the House of Representatives standing committee on economics that the decline in the market share of the big four banks over the past years was in response to “intense” competition. 

“The major banks, I think, were lending 80 per cent of all home lending only a matter of a few years ago and are now lending something like less than 60 per cent,” he said.

“That tells me that the competitiveness in the consumer lending sector is intense, and we need to sharpen our act and get more of it.”

 [Related: ‘We need more of it’: NAB rues loss of mortgage market share]