The alarming slide in ANZ’s mortgage business deteriorated into a crisis in July after scores of borrowers refinanced with other lenders and loyal customers accelerated loan repayments.
According to official data published by APRA on Tuesday, the borrower exodus helped to drain more than A$1 billion worth of loans from the bank’s mortgage book, confirming an intensification of a negative seven-month trend for one of the bank’s core businesses.
ANZ’s home loan book stood at $262.79 billion at the end of June, but a collapse in broker support for flagship mortgage products resulted in the portfolio contracting to $261.77 billion in July.
The bank is now bleeding market share at a rate equivalent to its disastrous mortgage meltdown in 2019, which crunched its mortgage book by more than 1.5 per cent.
ANZ is the only major bank to have suffered a contraction in its home loan book this year, despite searing demand from homebuyers.
At the start of January its book stood at $262.22 billion.
Internally, pressure is growing on senior executives to improve turnaround times on mortgage applications received from brokers.
As previously reported in Banking Day, a blowout in assessment times in March has been the main driver of ANZ’s sliding volumes this year.
While waiting times have improved markedly since then, the lengthy delays have dented broker confidence in the bank’s systems.
Mark Hand, the head of ANZ’s Australian banking arm and John Campbell, the general manager of mortgages, are the executives feeling the most heat, right now.
In an interview with ANZ’s inhouse publication Bluenotes on Tuesday, Hand could not say when he expected the bank’s mortgage business to return to system growth.
Moreover, he tried, somewhat unconvincingly, to attribute most of the recent contraction exclusively to existing borrowers accelerating repayments.
“ It’s an interesting question given there are several parts to the market,” Hand said when asked when the bank would again match system growth.
“The nature of owner-occupiers though is they pay their homes off which is great from a financial wellbeing perspective.
“And while it’s a great thing for customers it means we have to work even harder to replace those funds under management, those lending assets, on the balance sheet.
“That’s okay, we’re up for the challenge but what we are not going to do is change any of our risk standards.
“We will have levers we can pull but don’t expect us to chase unprofitable growth.”
Hand said the bank was throwing more people and resources into the broker servicing channel and progressing efforts to automate assessments.
Campbell might be under even greater pressure than Hand given that he has been one of the architects of the Australian home loan strategy, including marketing campaigns intended to support growth in the business.
However, there was some positive news in the latest APRA statistics for Hand and executives working in the business lending area.
The bank appears to have recorded a stellar month in business lending, with total lending to non-financial businesses rising $930 million to almost $115 billion.
This is a big turnaround for the bank following a six month period in which