The numbers look bad for Shayne Elliott and his management team at ANZ.
Official data show that the country’s fourth largest bank has suffered a contraction in lending activity since the end of January, while major bank peers and most other regulated lenders feasted on voracious demand for home loans.
APRA’s latest monthly dataset released on Wednesday points to a tale of ANZ’s declining relevance in the mortgage market and most other lending sectors.
In the four months to the end of May, ANZ’s domestic loan book shrank by A$1.5 billion to $408.1 billion – a remarkable performance given that total lending by all Australian banks expanded by more than $30 billion in the same period.
The three other major banks all grew – CBA (up $11.5 billion) Westpac (up $6 billion) NAB (up $5.6 billion).
So far this year a swathe of second tier lenders have each posted significant market share gains in aggregate lending mostly at ANZ’s expense – Macquarie (up $6.2 billion) and Bendigo (up $2.5 billion).
ANZ is also ceding ground to a long line of customer-owned lenders led by Regional Australia Bank and Heritage Bank.
It is difficult to reconcile ANZ’s performance with the buoyant economic conditions that Elliott laid out for a federal parliamentary committee in the middle of April.
“As we sit before you today, we are facing the most positive economic conditions that we have seen in the six years this committee has been enquiring into the major banks,” he told the House standing committee on economics.
Elliott might be right about the direction of the economy, but his bank’s shareholders seem less likely than others to reap the benefits at the end of the year.
Problems with ANZ’s loan assessment and broker servicing platforms have been known for several years, but the bank seems to have made little progress in remedying them.
As reported last week in Banking Day, assessment waiting times at ANZ for standard home loan applications blew out to four weeks in May, with self-employed borrowers having to wait more than six weeks.
Brokers now say they are bypassing the bank’s mortgage products because their clients are unable to tolerate the delays on assessments.
Elliot faced the same issue in the middle of 2019 when ANZ’s home loan business was haemorrhaging customers who were refinancing elsewhere.
At the time he promised to upgrade his underperforming assessment systems with a “technology fix” that was meant to restore confidence among brokers.
The bank’s dismal mortgage numbers this year are a clear sign that the “fix” either failed or has not yet kicked in.
The prospect of ANZ nullifying its mortgage market losses with a revenue windfall from other higher margin lending activities looks slim at best.
That’s because the bank is also losing ground in business lending.
According to the APRA data, ANZ’s lending to non-financial corporations declined by almost $900 million in the four months to the end of May.
In the same period CBA and NAB expanded lending to non-financial corporations by $3.9 billion and $3.4 billion, respectively.
Unless Elliott is able to reverse these worrisome trends in