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ANZ becomes third-largest mortgage lender

The big four bank has reclaimed its title as Australia’s third-largest mortgage lender after strong home loan growth, particularly from the broker channel.

On Wednesday (5 May), the big four bank released its half-year results for the first half of the financial year 2021 (1H21), revealing that it has “regained [its] place as the third-largest lender …adding more than 92,000 new home loan accounts this half in Australia”.

The lender was previously the fourth-largest mortgage lender of the big four, behind CBA and Westpac, but pulling ahead of NAB (however, NAB reports its half-year results later this week).

According to ANZ’s results, the major bank’s home loans portfolio was $281 billion in 1H21, up nearly $20 billion on the previous two halves ($264 billion in 2H20 and $269 billion in 1H20).


Its flow of loans in the half was $34 billion.

Over 40 per cent of its flows in the first half were for fixed rates, the bank revealed, noting the low interest-rate environment.

The bank added that there was strong growth in both the owner-occupier and investor segments.

ANZ CEO Shayne Elliott said: “Home ownership is core to what we do, and I’ve been satisfied with the turnaround of our business in Australia while we continue to lead the market in New Zealand.

“In Australia, we grew in our targeted segment of owner-occupiers and maintained our high-quality lending standards without growing costs.

“As we sit here today, we have regained our place as the third-largest lender … adding more than 92,000 new home loan accounts this half in Australia.

“It was a similar story in New Zealand where we grew faster than the market and remain firmly in the number one position.”

The bank saw 42,000 loans totalling $13 billion written in New Zealand in the half, taking its total book to just under $90 billion as at end of 1H21.

Notably, 58 per cent of ANZ’s home loan flow came from the broker channel in 1H21. This is markedly up on the same period last year, when broker flows made up less than half (49 per cent) of mortgage flows.

Overall, brokers originated 54 per cent of ANZ loans, as at the end of 1H21 (up from 52 per cent).

The increase in broker-lodged loans comes despite blowouts in turnarounds through the third-party channel.

Indeed, noting the delays on Wednesday, Mr Elliott said: “Challenges remain in Australia with home loan turnaround times, particularly in the broker space, given the ongoing growth in applications. 

“While we’d almost doubled our assessment capacity, the new business we attracted regularly exceeded capacity. 

“That means our assessment service levels in recent times have not been where we need them to be.

“We know we need to improve and we’re investing in all stages of our processes. 

“Increasing the use of automation will be a key factor. 

“The benefits of automation are best highlighted by how we assess applications through our branch network, where two-thirds of decisions are automated and customers are receiving a first decision on average within two days.” 

Mr Elliott told our sister brand The Adviser that investing more in automating loan assessments through the broker channel is “on the priority list at the moment”.

Looking ahead, Mr Elliott said the bank expects mortgage growth to “moderate in the second half”, as customers pay down their debt faster.

“This is good for the economy and good for our customers. It’s equally critical in helping customers ‘own’ their home faster,” the CEO said.

“As we look further ahead, we would expect slowing population growth will begin to have an impact on demand in Australia and New Zealand,” he added.

[Related: Loan commitments break $30bn mark: ABS]

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