Steve Laidlaw, CEO, People First
Service standards and turnaround times on home loan applications have blown out, badly, at People First Bank, at least for applications lodged via mortgage brokers.
The result of the recent merger of Heritage Bank and People’s Choice Credit Union, it seems that at least in the mortgage domain the well-regarded management team of the bank are struggling.
Influential names in mortgage broking have told Banking Day that service levels from the bank rank among the worst in the industry.
This is a surprising development for a bank that (especially in the case of Heritage) founded its prosperity and many, many years of above ssytem growth rates on its respectful engagement with mortgage brokers and aggregators.
A few weeks ago People First were taking as long as 15 days just to pick up an application for a refinance - typically a straightforward matter for any mortgage funder.
The bank is now taking around 20 days to pick up one of these files. When the credit team has questions for the broker and the customer, this drags the timing out by another week or longer.
According to brokers the industry median, for purchases as well as refinances, is around one to two weeks.
In the case of the major banks credit decisions are made in around 24 to 48 hours, a function of heavy investment in systems, people and broker relationships.
In response to a series of detailed questions from Banking Day, People First Bank pretty much denied everything, while turning down the opportunity to confirm, clarify, rebut or share any data on service standards.
In written comments Nic Savage, group head of lending said “we monitor the turnaround times for broker loans very closely, and there has been no recent change or increase.
“Integration plans are on track and as noted above have not had any impact on service levels.
“Our focus is on bringing to life the People First Bank broker proposition over the next six to 12 months.
“The broker channel is very important for People First Bank and a strategic focus with our Lending Transformation program working to deliver these benefits to brokers and their customers.”
The bank has mortgage processing capacity distributed across five offices in Toowoomba, Brisbane, Melbourne, Adelaide and Darwin.
With $27 billion in assets People First Bank is the largest mutual bank in Australia. Its mortgage book was $19 billion as of June.
A month ago Steve Laidlaw, the deputy CEO (and former CEO of People’s Choice) replaced long-serving CEO Peter Lock.