Middle tier banks such as AMP are bleeding market share in home lending as major lenders tighten their commanding grip on mortgage activity.
The latest official data published by APRA on Wednesday revealed AMP Bank and Bank of Queensland as the big losers in the home loan market in December, closely followed by Bendigo and Adelaide Bank.
Australia’s mortgage market expanded by A$9.19 billion during the month to more than $2.15 trillion but the size of the AMP and BOQ home loan businesses contracted.
AMP’s mortgage book fell $332 million to $22.96 billion, while BOQ’s book was down $207 million to $59.11 billion on 31 December.
Each of these banks have suffered run-off in their home loan businesses since the start of October.
Bendigo, which has also been shedding market share throughout the December quarter, managed to grow its mortgage business by a modest $15 million in the final month of the calendar year.
Lending in December was dominated by five banks – CBA, ANZ, Westpac, Macquarie and ING - which together accounted for more than 90 per cent of system growth.
After spending most of the December half on the sidelines, Commonwealth Bank re-entered the mortgage market in a big way.
The country’s largest lender accounted for more than one in three loans written in December after boosting its mortgage book by $3.65 billion.
ANZ capped its blistering rate of growth throughout the half by expanding its loan book by $2.08 billion in the month.
Together, CBA and ANZ accounted for 62 per cent of system growth.
Westpac grew its book by $1.83 billion to $461.9 billion, while Macquarie was up $1.11 billion.
Dutch-owned ING Bank Australia defied the negative trendline of middle tier lenders to post significant growth.
ING increased the size of its mortgage business by $550 million to more than $58 billion.
National Australia Bank posted modest growth.
Its home loan assets grew by $219 million over the 31 day period.
Most customer-owned banks and credit unions appeared to withstand the refinancing storm that pushed thousands of borrowers to Macquarie and the majors throughout 2024.
Mutuals that carved out market share gains in December were led by Bank Australia (up $138 million), Newcastle Greater Mutual Group (up $109 million), Qudos Bank (up $90 million) and Perth-based P&N Bank (up $87 million).
Canstar director Steve Mickenbecker said the mutual sector typically had a strong record of maintaining their loan asset bases in rising rate environments.
“The customer-owned banks rely mostly on retail deposits to fund their lending which gives them an advantage over non-bank lenders who are more exposed rate-sensitive wholesale funding,” he said.
Australia’s largest customer owned banks - Great Southern Bank and Heritage-People’s Choice – reported flat growth for the month.