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APRA stats reveal another drop in CBA mortgage book

The major bank has continued its downward trajectory, recording another month of losses driven by a decrease in its owner-occupier loan book.

The Commonwealth Bank of Australia’s (CBA) mortgage portfolio fell from $543 billion in August to $542 billion in September 2023, down by approximately $794 million, according to the latest monthly authorised deposit-taking institution (ADI) statistics released by the Australian Prudential Regulation Authority (APRA).

CBA’s owner-occupier loan book fell by $836 million in September, however, remained about $362 billion. On the other hand, CBA’s investor book saw a small recovery this month, up by $43 million to hold steady at around $180 billion.

CBA, however, has still maintained its top spot in mortgage market share.

ANZ’s mortgage portfolio saw the strongest growth in September, up by $2.5 billion from $283 billion in August to $285 billion.

The bulk of ANZ’s growth was due to an increase of $1.9 billion in its owner-occupier loan book, from $188 billion to $190 billion.

Investor loans for ANZ also saw the largest increase, reaching $95 billion in September from $94 billion, up by $637 million.

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Westpac also continued to grow its total mortgage portfolio in September, up by around $1.23 billion in September from $454 billion to $455 billion.

The major bank’s owner-occupier loan book grew by $1.05 billion to $298 billion in September (up from $297 million in August) and its investor loan book remained steady at $157 billion, up by $171 million.

NAB recorded an increase in its mortgage portfolio of $955 million, slightly easing from the $1 billion recorded in August, reaching $312 billion from $311 billion.

Its owner-occupier loan book grew by $1.05 billion for the month, however, NAB suffered a loss of $91 million in its investor loan book, although it remained above $108 billion.

Overall, APRA revealed that the total mortgage book of Australian ADIs rose from $2.12 trillion to $2.13 trillion.

Both owner-occupier and investor loan books rose in the volume of loans held when compared to the previous month.

The volume of owner-occupier loans held by Australia’s banks rose by around $5.6 billion in September, slightly accelerating from the $5.3 billion reported in August, reaching a total of $1.44 trillion.

Investor loans for the month also grew from $689 billion in August to $690 billion in September, up by approximately $1.3 billion, down on the rise from August, which recorded an increase of $1.8 billion.

Chance for CBA to ignite competition

Head of Trial Homes, Nick Young, noted that there’s potential for CBA to spark up competition amid a drop in its market share, triggering another mortgage war among the banks.

The banks competed with each other for refinancing customers throughout 2023 via cashback incentive offers.

Mr Young flagged that if CBA decided to regain lost market share, competition could spark up once again, although cashback offers are likely off the table.

“I think they’re probably dead and buried for a while,” Mr Young said.

Competitive interest rates are expected to be the banks’ next move to regain market share, led by CBA.

At the time of writing, the only major bank to still offer cashback deals is ANZ, although they have reduced incentives from 26 August 2023.

[RELATED: ADI owner-occupier book grew $5.3bn: APRA]

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