In an interview published on the bank’s publication bluenotes, Mark Hand, ANZ group executive Australia retail and commercial recounted how the group was planning to recover from a recent fall in its lending.
As revealed in APRA data released on Tuesday, ANZ was the only major bank to see slips across both its owner-occupied and investor portfolios during July – while its major rivals only recorded falls in investor lending.
ANZ’s total book had decreased from $262.8 billion in June to $261.8 billion in July. The owner-occupied portfolio was down from $175.3 billion in June to $174.6 billion in July, while investor loans fell from $87.4 billion in June to $87.2 billion in July.
The bank also reported that its book dipped by $300 million in the June quarter, with a rise in lending offset by higher repayments.
Responding to a question about the APRA statistics, on whether ANZ had found the home loan market tougher than its major rivals, Mr Hand commented: “That’s a fair assessment of the last few months.”
However, he noted the bank had not expected a “huge, sustained rise” in application volumes this year, particularly in the refinance market, with customers shifting to adopt fixed rates.
“This means we are now handling double the applications we were two years ago and unfortunately assessment times moved out to a level we weren’t happy with,” he said.
ANZ has dedicated a team of staff to reducing assessment times – which has whittled it down to seven days for applications received from brokers, according to Mr Hand, although direct loans have maintained shorter time frames.
A recent Broker Pulse report, based on a survey of brokers, revealed ANZ’s average turnarounds were 14 days in July, down by four days from the prior month.
“This improvement in response time is largely due to the both increased resourcing and reallocating existing resources, that is, more assessors as well as some process improvements and simplifying some of our policies,” Mr Hand said.
“The next critical step we are working on is automation of manual steps and processes and that is going well and will set us up for future volume fluctuations.”
ANZ is also looking to reduce the rework loops and back and forth communication, to collect information needed for its final approval.
With assessment times trending downwards, Mr Hand noted business from the broker channel has begun to recover.
“We’ve probably been the most reliant on the brokers of the major banks and I’m pleased we are starting to see the broker business return,” Mr Hand said.
Considering the current COVID conditions, ANZ reported that customers appear to be in better shape than a year ago – with current loan deferrals sitting at around 2 per cent of the levels it saw last year.
Mr Hand explained government stimulus has continued to have an impact.
“Customers are more confident and possibly see a light at the end of the tunnel… vaccinations rates are also continuing to rise. Households were very sensible last year and boosted savings,” he said.
“There was a lot of cash in the system which has set up the economy well and this is probably having an impact on how customers are managing through differently this time around.”
He added the expansion of the government’s SME loan guarantee scheme will help, but the best pathway to opening up businesses is to drive up vaccinations and prevent lockdowns.
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Sarah Simpkins is the news editor across Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth for InvestorDaily and ifa.