A non-major bank has recorded a fall in the number of mortgages written through its own financial planners as a result of strong growth in the third-party channel.
AMP Bank delivered residential mortgage book growth of $808 million in 1H16 to $15.4 billion (an increase of 5.5 per cent from FY15 and 5.8 per cent from 1H15) driven by strong growth in owner occupied lending.
In a trading update last week the lender noted that growth in investment property lending, including SMSF property loans, is improving since the bank recommenced investment lending in November 2015.
AMP’s loan growth over the half-year was delivered through both the broker and AMP aligned adviser channels.
“Whilst sales through AMP’s aligned adviser channel were up on 2H15, its portion of AMP Bank’s mortgage new business fell to 19 per cent (from 24 per cent in FY15) due to strong growth in the mortgage broker channel. This partially reflects ongoing weakness in investment lending growth, in line with market trends,” the bank said.
Owner occupied loans made up 73 per cent of the mortgage portfolio at 30 June 2016, while investment property loans were 27 per cent.
AMP Bank managed to buck the trend of the big four by lifting its margins over the year to 30 June, a period marked by “intense” competition and heavy discounting.
“Net interest margin was 1.71 per cent for 1H16, up 18 basis points from 1H15, and up 7 basis points from 2H15. The impact of increased competition for owner occupied lending was offset by enhanced liquidity management and pricing decisions on investor and owner occupied loans in line with market conditions.
“Residential mortgage competition, particularly in the owner occupied market, remained intense in the period with continued market-wide discounting.”
[Related: Top non-major lenders revealed]
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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