Aggregators have stressed that lending competition remains strong following Suncorp Bank’s closure to new applications, yet conceded that growing consolidation was narrowing the market.
Suncorp Bank’s lending closure has sparked contrasting views on the current state of competition in the lending market, despite mortgage aggregators broadly stressing that borrowers still retain extensive lending options.
Suncorp Bank ceased accepting new lending applications from 7 October as preparations continue for its integration into Australia and New Zealand Banking Group (ANZ), which completed the acquisition in July 2024.
In broker correspondence seen by The Adviser, Suncorp outlined the closure’s reach beyond applications from prospective customers.
“From the effective date, we’ll cease accepting applications for Suncorp Bank lending,” the bank said.
“This includes any new lending needs, and services for existing Suncorp Bank customers that will require a new application, or that will generate a variation letter which creates a new account, or that will generate a new letter of offer or credit contract.”
Prepared but unsubmitted applications needed to be lodged before 7 October.
Subsequent requests require assessment of suitable alternatives, with ANZ an option where appropriate and accredited brokers required to complete a new ANZ application.
Confidence in alternative lenders
Reacting to the development, outsource Financial CEO Tanya Sale told The Adviser that she expected other lenders to pursue opportunities created by changes in ownership and market participation.
Although individual credit policies and flexibility may differ, Sale said she did not expect a substantial shortage of alternatives.
“While there may be some individual scenarios where brokers need to look a little harder for a solution, I don’t see a significant policy gap emerging,” Sale said.
“The current lending landscape is deep and diverse. The strength of the broker channel is that we’re not reliant on any one lender. When a lender exits or changes strategy, brokers adapt very quickly and identify alternative solutions for their clients.
“There are already several lenders on panel that can meet the needs of the borrower, so I don’t expect any deals to fall through the cracks.”
Meanwhile, Connective executive director Mark Haron similarly argued that ownership changes should be considered against the range of lenders still competing for business.
“Changes in lender ownership and offerings are part of an evolving lending market,” Haron said.
“Borrowers continue to have options across major banks, non-majors and non-bank lenders. What matters is how those options meet their individual needs, and brokers play an important role in making that connection.”
Haron also expressed confidence that differences between lenders’ products and policies would continue to accommodate varied borrowing needs.
“We’re confident in the breadth of lending options available and don’t see this development as a cause for broader concern about policy gaps. Clients’ needs are varied and often complex, which is why access to lenders with different products and credit policies is so valuable,” he said.
Sale said evolving lender appetites and ownership structures did not justify fundamentally changing business allocation, with clients’ best interests remaining central.
“Our role as an aggregator is to ensure our brokers continue to have access to a wide range of quality lenders and solutions so they can deliver the right outcome for their clients,” she said.
“Competition remains strong and we are continually seeing lenders invest in product innovation, service, and credit policy to differentiate themselves.”
AFG warns of thinning market
Yet Australian Finance Group (AFG) general manager industry and partnerships, Mark Hewitt, offered a more cautious assessment of the market’s structure.
Hewitt told The Adviser that rising competitive pressures were encouraging consolidation among customer-owned institutions, for example.
“The middle of the lending market is thinning. Many customer-owned banks are under pressure to merge to build the scale needed to compete,” Hewitt said.
He also identified preferential direct-channel pricing as another source of pressure.
“Channel conflict is adding to the pressure. Some lenders, both large and small, are openly prioritising their direct channels with preferential pricing and offers,” Hewitt said.
“Brokers recommend lenders on what is right for each client, and what aggregators can do is keep a strong, diverse panel that gives the non-bank sector an opportunity to step up and fill the gap.”
However, Hewitt argued that access to funding was essential if smaller lenders were to compete effectively.
“Non-bank lenders must have the opportunity to compete, and that depends on funding. AFG Chair Greg Medcraft has argued publicly for a government-backed public securitisation scheme that allows non-bank and smaller lenders to fund on a stable, level footing,” he said.
Practical transition considerations
Sale said outsource Financial would advocate for customers affected by delays outside their control, yet added that significant network-wide issues were not anticipated.
“While there are still some practical considerations around commission continuity and specific transition scenarios, I think it’s important we not lose sight of the bigger picture,” Sale said.
“ANZ doesn’t want to lose these customers, brokers want to support their clients, and customers want certainty.”
Haron, meanwhile, stressed that Connective’s approach remained focused on individual circumstances, supported by lender information and expertise.
“That includes looking at the options available and weighing up what a change would mean for the client, not just the rate, but the costs, features and their existing arrangements. We’re here to support our members in continuing that work,” he said.
[Related: Suncorp informs brokers banking products will migrate to ANZ]
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