ANZ has had no growth in its mortgage book over the past three months and has gone backwards over the past year – a failing chief executive Shayne Elliott will have to account for when the bank presents its half-year financial report tomorrow.
According to the latest APRA lending data, the value of ANZ’s home loan portfolio has fallen from A$263 billion in March last year to $260.5 billion last month – a fall of 0.9 per cent.
System growth over that period was 7.9 per cent. Commonwealth Bank and NAB grew their books a little above system over the 12 months and Westpac’s book grew by 4.4 per cent.
Last year, Elliott conceded that the bank had an unwieldy loan approval process that included manual assessment of loans originated by brokers and mobile lenders.
Approval times were too slow, which prompted brokers to turn to other lenders.
Elliott said the bank was increasing its assessment capacity and simplifying processes by introducing more automation into the system.
At a presentation last October, Elliott said he was confident the bank would achieve home loan asset growth in the first half of the 2021/22 financial year. It has not done this.
It’s not for lack of trying. Reports indicate that approval turnaround times have improved and earlier this year the bank restructured its home loan portfolio, simplifying the product range and removing a number of fees.
In recent correspondence with brokers, ANZ said the indicative assessment time for a new application was three business days for a “simple” loan and nine for a “complex” one.
It may be a case of needing more time to earn back the trust of brokers, who have plenty of other lenders to choose from.
Macquarie Securities pointed out in its analysis of the APRA data that the other majors performed very strongly in the mortgage market last year, when they took advantage of low-cost three-year funding from the Reserve Bank to offer cheap fixed rate loans. ANZ missed that bus.
Macquarie said the market share trend is now favouring smaller banks and specialist mortgage lenders, making ANZ’s job of recovering lost share that much harder.
Macquarie said that if the coming rate hike cycle is similar to those in the past, credit growth will moderate and this will be another hurdle for the bank.
“We believe ANZ will disappoint again,” was its conclusion.