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Westpac bounces back with multibillion-dollar mortgage boost

The big four banks have continued to record strong owner-occupier-driven portfolio growth, with Westpac and ANZ leading the pack in the final month of the 2020 financial year.

The Australian Prudential Regulation Authority (APRA) has published its latest monthly authorised deposit-taking institutions statistics (MADIS), reporting that each of the big four banks recorded mortgage portfolio growth over the month of June.

Westpac Group (includes subsidiaries) recorded growth in its home loan portfolio for the first time in 2020, with its book increasing by approximately $2.2 billion, from $406.3 billion to $408.5 billion.

This followed a cumulative contraction of approximately $1.7 billion in the first two months of the June quarter.

Owner-occupier volumes drove Westpac’s recovery, with its owner-occupied book increasing by approximately $1.7 billion in June, from $228.5 billion to $230.2 billion.

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The major bank also recorded a healthy improvement in its investment home loan portfolio, which grew by approximately $500 million, from $177.8 billion to $178.3 billion.

Westpac’s consolidation coincided with an improvement in its performance in the third-party channel, with Momentum Intelligence’s Broker Pulse data revealing that its share of lodgement activity increased to 17 per cent in June.

Westpac’s turnaround times also improved in June, down from an average of 16 business days in May to 11 business days.

ANZ’s momentum continues

ANZ matched Westpac’s mortgage portfolio growth in June, with its book also increasing by approximately $2.2 billion, from $248.1 billion to $250.3 billion. This followed $1.8 billion growth in May.

Owner-occupiers also fuelled ANZ’s growth, with its owner-occupied portfolio increasing by approximately $1.6 billion, from $162.8 billion to $164.4 billion.

ANZ’s investment portfolio increased by approximately $600 million, from $85.3 billion to $85.9 billion.

ANZ CEO Shayne Elliott previously told Mortgage Business that the bank experienced a sharp uptick in mortgage volumes in response to the COVID-19 crisis, particularly from owner-occupier refinancers.

However, the increase in mortgage volumes has come at a cost, with the bank’s turnaround times blowing out in recent months, closing the 2020 financial year at an average of 26 business days.

This has led to a sharp decline in ANZ’s share of broker lodgement activity, down 11 percentage points in June, from a peak of 66 per cent in May to 55 per cent.

The lags have prompted ANZ to introduce changes to its lending processes, which have included the onboarding and relocation of staff.

Smooth-sailing for CBA

The Commonwealth Bank of Australia (CBA) is the only big four bank to record consistent mortgage portfolio growth over the 2020 calendar year.

Following $900 million growth in May, CBA’s (includes Bankwest) mortgage portfolio increased by approximately $1.6 billion in June, from $451.7 billion to $453.3 billion.

Since the onset of the COVID-19 crisis, CBA’s portfolio has increased by a cumulative $7 billion.

As with its peers, owner-occupier volumes underpinned the improvement, with its owner-occupied book growing by approximately $1.3 billion, from $295.1 billion to $296.4 billion.

This was supported by an increase of approximately $300 million in its investment portfolio, from $156.6 billion in May to $156.9 billion.  

Investors dent NAB’s growth

A $1.1 billion increase in NAB’s owner-occupied book was slightly offset by a $300-million contraction in its investment portfolio.

The bank’s owner-occupied book increased from $155.1 billion to $156.2 billion, while its investment portfolio decreased from $107.4 billion to $107.1 billion.

As a result, NAB’s total mortgage portfolio grew by approximately $800 million, from $262.5 billion to $263.3 billion.

[Related: Westpac woes mount amid new disclosure failures]

Westpac bounces back with multibillion-dollar mortgage boost
Westpac bounces back with multibillion-dollar mortgage boost
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