One of Australia’s leading non-major banks has seen a significant drop off in broker-originated investor loans over the last month.
The latest AFG Competition Index, released this week, shows that for the non-majors the most dramatic change has been with ING Direct, which has fallen from 5.2 per cent of investment lending in July to 1 per cent last month.
Macquarie Bank also saw a fall in broker-originated investor loans from 5.3 per cent in July to 4.0 per cent last month. Suncorp also saw a drop off from 2.4 per cent in July to 2.2 per cent in August.
Bank of Queensland saw a considerable increase in its share of broker-originated investor loans, from 2.8 per cent in July to 5.4 per cent in August.
AFG Home Loans, the aggregator’s white-label offering, held the largest share of the non-majors for investor loans last month with 5.6 per cent, up from 4.9 per cent last month.
Meanwhile, the majors hit back hard as the market showed signs of uncertainty due to regulator-enforced changes to lender policy and pricing.
During June, major lender market share fell to 69 per cent but the trend was quickly reversed in July and August as lenders started to tweak their policies. This saw the majors stretch their share back out to over 74 per cent.
“With regulator-enforced changes to investment and interest-only lending, this is the most disruptive period we have seen in the market for some time,” AFG general manager of sales and operations Mark Hewitt said.
“Major lenders are capitalising on this and using the size of their balance sheets to dominate their smaller competitors.
“The top three of ANZ, CBA, Westpac and subsidiaries all have a very strong hand, however if there is a positive, it is that there is a very even spread amongst the next tier with some healthy competition within this group.
“Most of the investor changes were announced during July and are now starting to have an impact,” he said.
ANZ and CBA have both gained ground while Westpac has fallen back.
ANZ had the largest single market share of new mortgages in August of 19.2 per cent, followed by CBA (18.6 per cent) and Westpac (13.1 per cent). Among non-majors, the largest market share in April was held by AFG Home Loans (4.7 per cent)
AFG processed more refinancing loans (19.9 per cent) loans for ANZ than any other lender last month, while the big winner in the fixed-rate space was BOQ who leapt to a 15.8 per cent share.
With first home buyers, CBA was a clear leader in August with 19.3 per cent of the business.