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Big four bank breaks rank on broker channel growth

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Francesca Krakue 2 minute read

The lender yesterday announced a profit of $2.6 billion, which it said was driven by “strong proprietary channel performance”.

In a trading update to the ASX, the Commonwealth Bank (CBA) announced a statutory net profit of approximately $2.6 billion for the quarter ended 31 March.

The bank said the result was supported by income growth, cost discipline and sound credit quality.

In home lending, CBA explained that growth “continued to be underpinned by strong proprietary channel performance”.

CBA’s comments on its proprietary channel come after NAB’s new half-year results showed that it was brokers that made good headway for NAB during the period, writing 7.8 per cent of loans in New Zealand and 32.5 per cent of mortgages in Australia (up from 31.3 per cent the year prior). Meanwhile, the share of home loans coming through the direct channel fell from 68.7 per cent to 67.5 per cent.

Further, NAB’s broker mortgage volumes for Australia rose by nearly 10 per cent on the prior corresponding period. According to the major bank’s half year results, $92.5 billion of home loans in Australia came through the broker channel, up from $82.8 billion in the half year to March 2016.

Similarly, the proportion of new home loans written by brokers for ANZ increased by 5 per cent year-on-year according to the major bank’s half-yearly results. The bank said that 55 per cent of its new Australian home loans came through the broker channel in the first half of the financial year 2017, up from 50 per cent in the same period the year before.

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 exceptional BDM, broker and customer experience”.

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In yesterday’s trading update, CBA also pointed out that during the March quarter, investment lending reduced as a proportion of total new lending in its home lending portfolio.

“New interest-only lending is being closely managed, consistent with regulatory guidance,” it said.

It was a similar story for NAB; owner-occupiers accounted for 57.7 per cent of mortgages in Australia, with investor home loans down marginally to 42.3 per cent (from 42.9 per cent last year).

In terms of the mortgage make up in Australia for ANZ, its recently released half-year results showed 62 per cent of the loan book was for owner-occupiers (or 67 per cent of flow for the half), while 34 per cent was for investors.

[Related: Major bank’s broker-originated loans jump]

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