Large ADI turnarounds fastest on record: Broker Pulse

This is the fastest time on record in this lender segment and was down from five days in October 2022.

The survey of 220 brokers conducted between 1 and 15 December found that almost every large ADI they used either reduced their turnaround times or held steady month-on-month.

While Macquarie Bank sat at the top of the table with turnaround times of two days, other lenders also held steady in November, including the Commonwealth Bank of Australia (CBA) and ING (three days) and ME Bank and Adelaide Bank (four days).

Suncorp slashed its turnaround times by two days to three days in November, while National Australia Bank (NAB) and Bankwest’s turnaround times were down by a day to four days.

ANZ and St.George Banking Group’s turnaround times were both down by a day to five days and six days, respectively, in November.

In its 2022 full-year results, ANZ stated that it had “restored momentum in Australian home loans with application approval times back in line with peers”.

ANZ chief executive officer, Shayne Elliott, said at the results’ media briefing that the major bank would begin piloting a digital home loan with staff that would see the introduction of a “fully automated digital home loan, initially focused on the refinance market, later in 2023”.

While Westpac reduced its turnaround times by a day to seven days in November, it continued to trail behind its counterparts at last position, according to the Broker Pulse data.

AMP Bank was the only large ADI to increase its turnaround times from five days in October 2022 to six days in November.

Turnaround times at the small ADIs increased slightly from five to six days month-on-month in November, as time to an initial credit decision slowed at eight out of the 12 lenders in this segment.

They increased from nine days to 12 business days (almost three weeks) at Newcastle Permanent in November to be ranked last among the small ADIs.

Conversely, brokers reported an improvement in turnaround times at P&N Bank, which were down from 12 days in October to eight days in November.

Among the non-bank segment, while turnaround times were down by one day to five days in November, Better Choice Home Loans increased its turnaround times significantly month-on-month.

Indeed, they spiked from only four days in October to 17 business days in November (almost four weeks) to be ranked last.

La Trobe Financial’s turnaround times decreased by two days in November but were still at 13 days.

AFG Home Loans decreased its turnaround times by three days to two days in November to finish first in the non-bank segment, followed by RedZed, which remained steady at two days.

Client circumstances dictate broker choice

As turnaround times improved or held steady across the lender segments in November, a lower proportion of brokers surveyed cited them as a primary reason for recommending a lender during the month.

Indeed, only 43 per cent of brokers indicated this as a reason for choosing a non-major bank, down from 51 per cent, while a quarter cited it as a reason for choosing a major bank, down slightly from 26 per cent in October and 27 per cent said they used a non-bank, steady from October.

Client circumstances were the most important consideration for brokers choosing both major banks and non-banks, according to the survey.

Almost three-quarters (72 per cent) of the brokers surveyed said client circumstances were the primary reason for choosing a major bank (up 12 percentage points from 60 per cent in October), while 78 per cent chose non-banks (up 15 percentage points from 78 per cent) and 54 per cent chose non-major banks (up from 52 per cent).

On the other hand, product pricing topped brokers’ primary reason for choosing non-major banks at 77 per cent in November, while 43 per cent chose major banks for this reason.

Only 31 per cent opted for non-banks due to product pricing, down from 36 per cent in October.

Brokers are increasingly considering client circumstances and product pricing as their clients contend with multiple variable interest rate rises from the major banks and many other lenders.

This followed the eighth consecutive rate hike by the Reserve Bank of Australia to 3.1 per cent in December 2022, the highest in a decade (November 2012).

REA Group’s Mortgage Choice financial services CEO, Anthony Waldron, recently said that both borrowers and their brokers have been impacted by serviceability stress, while highlighting the critical role of brokers in holding the hands of refinancers and potential borrowers.

Commenting on the trends, Momentum Intelligence director, Michael Johnson, said: “Brokers are enjoying speedier turnaround times as we lead up to the holiday season.

“However, there are still some lenders who are slower so brokers still need to be mindful of the lenders’ SLAs.”

To find out more about the Broker Pulse survey and participate in future surveys, visit the Broker Pulse survey website.

[Related: ‘Golden opportunity’ for brokers as borrowers fear loan rejection]