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Brokers are continuing to favour non-banks and non-major banks, according to the latest Broker Pulse survey, with the big four banks seeing record low share.
According to the latest findings of the monthly Broker Pulse survey from Momentum Intelligence, brokers continue to send their clients to smaller institutions.
A total of 191 brokers participated in Broker Pulse’s latest survey, conducted between 1 and 11 February 2022, revealing that brokers are shaking up their submission routes.
More than half (53 per cent) of broker respondents used non-bank lenders over the month of January, the report found, despite the sector having experienced a downward trend in third-party applications the previous quarter.
The non-banks continue to have the fastest turnaround times, averaging around seven business days to initial credit decision.
As a result of the increasing popularity of non-banks, the proportion of loans going to non-majors and major banks dropped over the month.
In fact, just 68 per cent of brokers said they had used a major bank in the month of January (down from 73 per cent in December), a new record low. This was despite brokers revealing that all four major banks had improved turnaround times in January (albeit ANZ still trailing behind with an average of 16 business days to initial credit decision).
Macquarie was back on top of the leaderboard this January, after receiving the highest number of third-party lodged applications in January. The lender was also among the fastest to turn credit decisions around, at four business days, according to brokers.
The non-major, which received 42 per cent of broker flows, outperformed all other lenders last month and marked a seven-month high for the bank. The last time Macquarie placed first in the leaderboard was in June, where it took 43 per cent of broker share, according to Broker Pulse.
Second in demand was the Commonwealth Bank of Australia (CBA), with 41 per cent of brokers writing a loan with the major bank last month.
The bank experienced a 5 per cent dip in its broker share in January, continuing its pattern of oscillating broker share, which has been ranging between 39 and 46 per cent since August 2021.
Australia and New Zealand Banking Group (ANZ) leapt two places to land at the third spot in January’s leaderboard. The major bank increased its broker share by 6 per cent to the current 35 per cent, overtaking both St.George Banking Group and ING in the monthly survey.
The increased broker share of ANZ in January is a break from its past trend, which saw the major bank lose its broker share month-on-month since its high in August 2021.
ANZ has also managed to cut two days off from its processing speed in January. However, with turnarounds averaging at 16 business days, the major bank still has one of the slowest processing speeds across all lender categories.
The figures echo a trend noted by Australian Finance Group (AFG) recently, which highlighted in its most recent AFG Index that while brokers were writing record volumes of loans, the majors were losing share.
For example, the proportion of refinance applications being sent to the major banks sank to near record lows in the final quarter of the year, AFG found, taking less than half (47.3 per cent) of refinance lodgements from AFG brokers. This figure was nearly 10 percentage points higher in the same period in 2020.
Noting the figures, AFG chief executive David Bailey commented: “In a sign of a healthy level of competition, the country’s non-major lenders’ market share is up to 46.5 per cent,” he said, noting that this cohort’s largest market share from AFG brokers was recorded in Q2 FY20 when they reached 46.9 per cent.
“Conversely, the big four banks and their associated brands were down from 57.31 per cent last quarter to 53.55 per cent, their second lowest market share recorded in the past 10 years.”
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[Related: Lender turnarounds lengthening again]
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