Major bank’s broker-originated loans jump

It marks the third year in a row that the third-party channel has increased the flow of loans going through it, and broker-originated loans now make up 50 per cent of ANZ’s Australian home loan portfolio.

ANZ has previously told The Adviser that it has been "really impressed" with how brokers engage with their customers and lenders, with Simone Tilley, ANZ's head of retail broker distribution, stating that "customers are choosing with their feet, and [ANZ therefore] needs to drive an exception BDM, broker and customer experience".

However, Ms Tilley said that the bank is "channel agnostic, telling The Adviser: "We're about providing choice for customers, irrespective of what channel they decide to choose... we're all very cognisant of not promoting one channel over another. Those choices are made by customers," she said.

The half-year statistics show that the proportion of home loans given to owner-occupiers also increased by 5 per cent in the first half of the year, making up 67 per cent of flow. Meanwhile, rate hikes to slow investor lending seem to be working, with the proportion of loans given to investors falling from 34 per cent in the prior comparative period, to 31 per cent. The remaining 2 per cent was for equity.

On a combined basis, the bank provides $320 billion in mortgages and $105 billion in business lending to customers in Australia and New Zealand.

According to the half-year results, the home loan portfolio now accounts for $256 billion funds under management (FUM) in Australia (with $34 billion coming through in the first half of the year), or 44 per cent of group lending. The average loan size in the book ticked up to $258,000 (or $382,000 in the first half of the year).

Over in New Zealand, the home loan portfolio saw a 1.4 per cent growth in the number of accounts held, with total FUM coming in at NZ$ 75 billion in the first half of the year.

While brokers lost a proportion of flow in ANZ’s New Zealand business (down 1 per cent to 38 per cent in the first half of the financial year), the channel as a whole is now responsible for 34 per cent of the ANZ home loan portfolio in New Zealand, up from 32 per cent in the same period last year.

Speaking of the results, CEO Shayne Elliott said: “[W]e are focused on being the best bank for home owners and people who want to start and run a business.

“Both Australia and New Zealand delivered a solid performance. We are growing prudently in home lending in Australia concentrating on owner-occupiers, and through a focus on the small business segment.”

'There is clearly an issue around housing affordability'

In an interview on ANZ Bluenotes after the results were released, Mr Elliott touched on the housing market, saying that the bank wanted to be involved in finding the "right solutions" to the housing affordability conundrum.

He said: “I don’t know if this is a housing market [bubble]; Australia is a big place (as is New Zealand in many ways), and it depends where you are. There is absolutely not a housing bubble today in Western Australia, the housing bubble that people talk about is really restricted to Sydney and Melbourne, more or less. And even within Sydney and Melbourne, there are pockets where prices are continuing to rise and there is absolutely evidence today of areas where prices are stabilising or falling in some areas, so I think it’s a little simplistic to say there is a housing bubble.

“Where there is an issue, is that there is clearly an issue around housing affordability. And in particular, for people who are new to the market to be able to afford to get a deposit together.

"So, there are some challenges in the business. We’re a big player in that market and have a responsibility to respond to those customer needs in terms of how to make that easier for people and convenient, but to do it in a responsible way. So, there are some challenges there, there’s not going to be simple answers; I think government, industry and regulators each have a role to play and we’re really keen to be involved and find those right solutions to those issues.” 

​Overall, the bank announced a statutory profit (after tax) for the half year ending 31 March 2017 of $2.9 billion (up 6 per cent on the prior comparative period), and a cash profit of $3.4 billion (up 23 per cent).

According to the bank, the results reflects “significant financial benefits emerging from the strategic and tactical decisions we took in 2016 to simplify the business, improve productivity and increase capital efficiency”.

[Related: Tracker mortgages ‘commercially unattractive’: ANZ chief]