AMP reports loan book lift in 3Q23

AMP Bank has revealed that its total loan book grew by $0.5 billion to $25 billion in 3Q23, with residential loan growth to the end of August 2023 being 1.64 times system based on the Australian Prudential Regulation Authority (APRA) market share data as at 31 August 2023.

However, the bank noted that this is expected to be subdued for the remainder of 2023 as it looks to continue to actively manage its portfolio among a “highly competitive market”.

Additionally, AMP Bank reported that total deposits increased by $0.8 billion to $22.1 billion during 3Q23 with the major of inflows being from customer deposits along with a moderate uplift in term deposits driven by customer rates. The deposit-to-loan ratio held “broadly steady” at 88 per cent.

AMP chief executive Alexis George commented on these results: “We continue to actively manage the Bank portfolio in what remains a highly competitive environment, particularly as the Term Funding Facility (TFF) refinancing continues across the market.

“We expect to see subdued growth for the remainder of the year as we continue to manage Net Interest Margin (NIM), with full year NIM now expected to be below previous guidance of 1.30–1.35 per cent.”

AMP Bank previously reported in its financial results for the first half of the calendar year 2023 (1H23) that its mortgage book grew 8.3 per cent on 2022, with the vast majority of new loans being written by the broker channel, reaching 94 per cent of its residential mortgages.

This marked the highest proportion of broker-originated loans for AMP Bank in recent years following a rise from the 92 per cent originated over the same period in 2022.

During that time, AMP provided home loans to 4,295 customers and increased its residential loan book to $24.3 billion.

Upsized RMBS

Prior to the release of this quarterly update, AMP Bank confirmed that its Progress 2023-2 Trust Residential Mortgage-Backed Securities (RMBS) was upsized from $500 million to $750 million.

The bank confirmed there were 31 investors in the transaction, with around 32 per cent by number of accounts being offshore investors and 37 per cent were real money investors.

Major bank Westpac was the arranger of the transaction along with the Commonwealth Bank of Australia (CBA), NAB, MUFG, Barrenjoey and Westpac as joint lead managers.

[RELATED: 94% of AMP Bank’s resi loans written by brokers]