A non-major lender has seen the growth of its mortgage book slow significantly over the past few months.
In a trading update yesterday, Macquarie noted that its Australian mortgage portfolio was $27.8 billion at 31 December 2015, up one per cent on 30 September 2015, representing approximately 1.9 per cent of the Australian market.
The latest APRA banking statistics value Macquarie’s mortgage book at $25.4 billion at 31 December 2015, up 2.4 per cent from September.
However, the bank’s loan book growth has slowed considerably through 2015. Between June and September last year the lender grew its mortgage book by 4.2 per cent, and by 11.7 per cent from March to June. In the first three months of 2015 Macquarie’s mortgage book grew by 13.9 per cent, from $18.7 billion at 31 December 2014 to $21.3 billion at 31 March 2015.
In yesterday’s trading update, Macquarie highlighted that operation risk is “particularly present in operationally complex investments, especially controlled assets and residential mortgages.”
Commenting on yesterday’s update, Macquarie chief executive Nicholas Moore said Macquarie remains well positioned to deliver superior performance in the medium term due to its deep expertise in major markets, strength in diversity and ability to adapt our portfolio mix to changing market conditions, the ongoing benefits of continued cost initiatives, a strong and conservative balance sheet, and a proven risk management framework and culture.
The bank also noted its current capital levels, including APRA Basel III group capital of $17.3 billion and group surplus of $2.8 billion at 31 December 2015.
The bank group APRA Basel III Common Equity Tier 1 ratio was 9.9 per cent at 31 December 2015, in line with 30 September 2015.
“The funded balance sheet remains strong and well-funded with total customer deposits of $42.5 billion at 31 December 2015, broadly in line with 30 September 2015,” the bank said.
Macquarie noted a number of challenges to the group’s short term outlook, including market conditions; the impact of foreign exchange; the cost of our continued conservative approach to funding and capital; and potential regulatory changes and tax uncertainties.