ANZ chief Shayne Elliott’s claim at the full year results that his bank’s home loan assessment processes were “seeing improvement” has proven premature with turnaround times on mortgage applications blowing out again in November.
It was another chaotic month for ANZ’s ailing mortgage business as assessment times doubled for thousands of loan applicants, including pay-as-you-go income earners requesting simple low-LVR loans.
The ghastly state of ANZ’s mortgage operation was compounded last week by ASIC’s decision to launch a civil penalties action in the Federal Court over the bank’s controversial introducer program after it allegedly accepted customer documents from unlicensed intermediaries between 2016 and 2018.
The legal case could retard the bank’s lending business further because introducers account for around 10 per cent of mortgages originated through the branch network.
Data collated by Banking Day from notifications to mortgage brokers in October and November show that mortgage assessment waiting times ballooned for applicants not requiring mortgage insurance from 6 business days on 25 October to 11 business days on 29 November.
Assessment delays were more pronounced for owner builders and applicants requiring guarantors.
Such applicants are now being asked to wait 35 business days (7 weeks) for assessments to be completed compared to 25 days at the end of October.
The data confirm that the operating performance of ANZ’s mortgage back office continues to deteriorate, rather than improve as Elliott asserts.
“Over several months we have materially increased assessment capacity by hiring more assessors and simplifying our processes,” he said on 28 October.
“Now there's a time lag between applications and asset growth, but we are already seeing improvement.”
ANZ is continuing to wear a heavy price for keeping loan applicants on hold, with APRA monthly banking statistics showing the size of the bank’s mortgage book continuing to erode.
The mortgage book contracted by A$66 million in October to $260.3 billion.
In the six months to the end of October the value of home loans sitting on ANZ’s balance sheet fell by more than $2.5 billion.
Since September last year ANZ’s share of the APRA-regulated mortgage market has fallen from 13.9 per cent to 13.1 per cent.
The blow out in assessment times in November will likely accelerate asset run-off in the next APRA dataset because brokers say they are urging most of their clients to select lenders with more efficient servicing platforms.
“ANZ turnarounds are erratic at best and a seven-week wait is simply too much of a burden to foist on borrowers,” a mortgage aggregation executive told Banking Day this week.
“The bank needs to build a more consistent platform if it wants to start growing again.
“This problem has been following the bank for a long time.”