ANZ’s owner-occupier home loan book squeezed

New data on the banks from APRA has shown that during December, total residents loans and finance leases across authorised deposit-taking institutions (ADIs) grew by $26.2 billion, or 0.9 per cent, to $3 trillion worth.

A $13 billion (or 1 per cent) rise in owner-occupied home loans to a combined $1.2 trillion total across the banks had led to the overall growth in lending during December.

The month before, banks had written $11.2 billion in owner-occupied loans.

Investor lending also continued to grow in December, increasing by $3.9 billion (0.6 per cent more), to $657.8 billion worth of outstanding loans.

The banks’ combined total home loan books came to $1.9 trillion.

“The sustained growth in housing lending reflects robust borrower demand bolstered by low mortgage interest rates,” APRA stated in a highlights document.

However, ANZ’s owner-occupied home loan book had fallen, with its total slipping by $200 million, from $173.7 billion worth in November to $173.5 billion in December.

The month before, the total had stayed steady from around $173.7 billion in loans in October.

The big four banks’ investor loans on the other hand had picked up, climbing from $86.9 billion in November to $87 billion in December.

But ANZ had seen declines in its home loan book earlier in the year, with its overall mortgage total dipping from $261 billion in August to $260.35 billion in October and $260.7 billion in December.

The group’s home loan book had fallen in the second half of the 2021 financial year, by $3 billion from the first half, down to $278 billion (although the total was up by 1 per cent year-on-year).

At ANZ’s annual meeting in December, chair Paul O'Sullivan and chief executive Shayne Elliott explained to shareholders that the bank’s manual assessment systems for broker applications had been overwhelmed by an influx of demand through COVID-19.

As Mr O'Sullivan recounted, the lagging loan turnarounds had “resulted in a loss of market share”.

Looking at the other big four banks, CBA had managed a $2.5 billion increase in its owner-occupier loans during December, to a total of $335.5, compared to $333 billion in November.

In investor loans, the bank recorded a 1 per cent rise (up $1.7 billion) from $168.9 billion in November, to $170.6 billion in December.

NAB also saw growth, with a 1 per cent increase across both owner-occupier and investor home loans loans, which totalled at $178.5 billion and $102.3 billion respectively.

For Westpac, there had been $2.5 billion in owner-occupier loans added to the book in December, leaving its total at $256.4 billion at the end of 2021. Investor loans were up by $1.4 billion from the month before, to $171 billion worth.

Meanwhile, APRA’s data showed overall credit card lending across the banks rose by $100 million (0.5 per cent) in December, to $6.1 billion worth of loans. The regulator described the movement as a “mild bounce from low levels”.

Other household lending, including fixed-term personal loans, had declined by $400 million or 0.5 per cent, to $20.2 billion.

Non-financial business lending on the other hand rose by $7.4 billion, or 0.9 per cent in December, to a total of $855.2 billion worth.

“This was likely driven by regained strength in business conditions given the fast roll-out of vaccines and easing restrictions,” APRA explained.

“However, the recent omicron variant and surging COVID cases may negatively impact business conditions in coming months.”

[Related: ANZ casts doubt on August cash rate hike]