ANZ, by choice or through lack of focus, is shrinking in key consumer banking product markets, especially on the asset side of the balance sheet.
The latest APRA banking statistics and ANZ's investor presentation for the March half-year present a continuing story of a bank in decline in consumer lending, mortgages above all.
On APRA's numbers, ANZ has ceded market share in mortgages each and every month since December 2017.
The bank's current market share of 14.6 per cent represents a loss of 1.70 percentage points over that period. The bank has lost almost 100 basis points over 12 months and 22 bps over six months.
ANZ yesterday reported that Exposures at Default (a proxy for credit exposure) in consumer lending fell from 38.8 per cent of all lending in March 2019 to 37.6 per cent in September 2019 followed by a heavy fall to 34.6 per cent in March 2020.
An overview of the bank’s home loan business in the investor pack shows total mortgages under management at A$264 billion at March 2020, down $5 billion over six months and down $7 billion over 12 months.
The number of home loan accounts was 971,000 at March, down 29,000 over six months and down 47,000 over 12 months.
As a percentage of all lending by ANZ in Australia the mortgage book was 59 per cent, down from 64 per cent.
The bank published a couple of charts showing that first, application volumes lifted over the March quarter and second, mortgage enquiries processed by the credit bureau Equifax exceeded the average for the four major banks overall.
Thus there may be a recent turnaround on the part of ANZ, which conceded at its full-year results briefing six months ago that it had had “execution issues”. Some of the decline was a function of risk settings, with the bank prioritising owner-occupied and principal and interest loans, bypassing the option of maximising interest-only loan flows (once popular with investors) in the face of APRA’s clamp on these a couple of years ago.
A current dilemma for the bank may be its standing with mortgage brokers; or at least the bank’s share of flows sourced from brokers fell to 49 per cent in the current half, down from 57 per cent in the second half of the bank’s last financial year.
Then there’s ANZ’s credit cards business. Once a beacon of strategic thinking and execution, the bank is now riding the downward wave in cards overwhelming the entire banking industry.
The bank’s credit card book on a risk-weighted basis was barely $5 billion at March, down 14 per cent in a year and 6 per cent over six months. APRA reported ANZ had $6.6 billion in card receivables at March, with the bank having seen around $1.6 billion in cards business vanish since early 2017.
On household deposits ANZ broadly tracked system over the last year, and growing deposits a little better than system over the March quarter.