Brokers back non-majors

Jessica Darnbrough

The majority of brokers would like to write more business with the non-majors in 2012, a new poll has revealed.

According to the latest The Adviser straw poll, 67.6 per cent of the 213 respondents said they would write more business with Australia's non-majors, while 32.4 per cent have no intentions of writing more loans with these lenders.

Over the last 12 months the non-majors have stepped up pressure on the big banks. Sharp pricing and attractive incentives for brokers has injected much needed competition into the marketplace.

Citibank has slashed more than 150 basis points from its three year fixed rate in a bid to offer one of the most competitive products on the market. Similarly, Suncorp has tweaked its commission structure in order to provide one of the more compelling broker propositions.

And, according to Suncorp's bank general manager intermediaries Steven Heavey, that's not the only change the lender has in the pipeline.

"We will also be looking at ways to expand our reach in 2012," Mr Heavey told The Adviser.

"Presently, we are known as a bank that specialises in the first home buyer market – we want to change that perception. If we are serious about wanting to be an alternative to the majors, we need a suite of products that effectively cater to all market segments."

But while Australia's non-majors are looking at ways to increase their market share The Mortgage Gallery's James Eaves said just because brokers want to write more business with the non-majors it doesn't mean they necessarily will.

"While it is certainly the plan to write more business with the non-majors, Australia's independent non-majors, in many instances, don't offer the same compelling price and policy proposition as the majors," Mr Eaves told The Adviser.

"There are few truly independent non-majors and those that are, aren't priced as well as the other lenders. Under NCCP, we have to be very careful and scrupulous about the products we put forward to our clients. The products have to be truly the best option for them and at the moment, generally speaking, the best option is a major lender.

"While this isn't the case for all, the majority of second tier lenders are more conservative around policy than the majors. While I would like to write more business with these lenders, it is often not possible."