Bendigo chases mortgage volumes with lower rates
Bendigo Bank last night sharpened its home loan pricing in a bid to retrieve market share that was lost in the six months to the end of December 2018.The country's largest regional bank has lowered the rate on its Bendigo Express variable home loan by 0.1 per cent to 3.79 per cent.It has also slashed the pricing on its no frills Basic Home Loan product by 0.2 per cent to 3.79 per cent.The repricings position both products at the pointy end of the variable rate market, but still behind price leaders such as loans.com.au (3.48 per cent) and Athena Home Loans (3.59 per cent).Bendigo is under pressure to boost home loan volumes after reporting a 2.4 per cent decline in cash earnings in the December half.A slowdown in mortgage lending activity weighed heavily on the result along with a 3 basis point decline in the group net interest margin.While the latest mortgage rate cuts are likely to further erode the net interest margin, Bendigo's management will be hoping that the repricings will enhance bottom line performance by boosting interest revenue."For customers who may be considering a new mortgage or change of mortgage provider, our decision to reduce the rate on our Basic and Express Home Loan products will provide them with a highly competitive offer," said the bank's head of consumer banking, Richard Fennell.Bank of Queensland is another regional player that has found the going tough in the home lending market since the middle of last year.APRA's monthly banking data indicate that BoQ's mortgage growth was flat in the six months to the end of February.The bank is scheduled on Thursday to unveil half year cash earnings of up to $170 million - well down on the 2018 interim cash result of $182 million.BoQ has responded to sluggish mortgage growth somewhat differently from Bendigo after deciding to reprice aggressively in the small business lending market.While the bank flagged the likelihood of a lower earnings performance in a trading update to the ASX in February, there is still some uncertainty as to how much the interim dividend will be slashed.Goldman Sachs analysts Ashley Dalziell and Andrew Lyons are forecasting interim earnings to fall by 8 per cent to $168 million.They see the first half dividend sliding 4 cents or 10.5 per cent to 34 cents.