Head of AMP Bank Sean O'Malley
After putting the brakes on home loan origination in the second half of last year, in response to margin pressure, AMP Bank is now suffering a big runoff in its mortgage book.
When AMP released its 2023 results in February, it reported that its residential mortgage book grew 1.7 per cent to A$24.2 billion last year. The was less than half the rate of system growth, which was 4.1 per cent over the 12 months to December.
AMP said it made a “deliberate decision” to lower mortgage book growth during the December half, given margin pressure.
“To improve return on capital, AMP Bank’s strategic focus is on disciplined responses, including nominal loan growth, diversifying and optimising funding and reducing costs,” it said.
Macquarie Securities analysis of the latest APRA ADI data shows that AMP Bank’s residential mortgage book ran off at an annualised rate of 16.6 per cent in the March quarter.
Its business lending and personal loan books also ran off during the quarter. No other ADI has suffered such a comprehensive setback in its lending business this year. Giving up market share to manage margin pressure can be a tricky business.
Macquarie’s data also show that ANZ continues to grow its home loan book above system, at 1.6 times system during the March quarter, while Commonwealth Bank, NAB and Westpac are all growing at around 0.7 or 0.8 times system.
The market leaders over the March quarter included Suncorp Bank, which grew at 7.3 per cent annualised, Judo Bank (5.9 per cent annualised), ING Bank (5.8 per cent annualised) and Macquarie Bank (5.4 per cent annualised).