ANZ chief executive Shayne Elliott has made it a top priority to restore momentum in the bank’s flagging home loan business and is throwing people, new processes and technology at the problem.
With big banks divesting many of the secondary parts of their businesses, including wealth, insurance and superannuation, it is critical for them to perform well in their core business. ANZ has fallen down in that area.
The Australian home loan book contracted 1 per cent in the September half to A$277.7 billion, as the bank struggled to process broker applications in a timely manner.
The bank’s mortgage market share fell from 14.5 per cent to 13.9 per cent in the year to September. It has not grown share for two years.
Elliott said the guts of the problem is that the bank conducts manual assessment of loans originated by brokers and mobile lenders. As the market has picked up over the past year the bank has not been able to keep up.
He said the bank has increased its assessment capacity, and started to simplify processes by introducing more automation into the system.
ANZ chief financial officer Farhan Faruqui said the immediate goal was to increase assessment capacity and achieve faster turnaround times.
“We are not where we want to be but we are making progress,” Faruqui said.
Elliott said he was confident the bank would achieve home loan asset growth in the first half of the current financial year and get back to a rate of growth matching its big bank rivals by the second half.
He has appointed Emma Gray, group executive, data and automation, to lead an operations team that will work on ongoing process improvements.
Elliott said: “Our application volumes are good. We have a competitive position in the market and we do not need to cut rates.
“Our problem is not that people don’t want to borrow from us. The branches are working well and our application processes in branches match our peers.
“The problem is in broker and the manual assessment of applications. These things take time to fix.”
According to Macquarie Securities’ annual Mortgage broker Survey, published last month, ANZ has one of the slowest approval times for broker originated loans, at 23 days. Brokers rated ANZ’s systems “inferior” and its processes “cumbersome”.
Respondents said ANZ had succeeded in reducing its average approval time from 30 days in 2020 to 23 days now, but it is still slow compared with most other lenders.
The bank is also working on the introduction of a digital home loan offering that will form part of a new “digital first” consumer brand, ANZ Plus, to be launched next year.
ANZ Plus will include partnerships with external providers to provide additional financial and non-financial products. The focus will be on financial coaching and personal financial management.
The bank is investing in this area through a venture business called 1835i. Most recently it acquired the rewards provider Cashrewards.