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The major has reported loan book growth and a rise in the share of brokers writing home loans.
Westpac Group (Westpac) has posted an increase in total lending and the share of loans originated through brokers in its half-year results.
In its financial results for the six months to March 2025 (1H25), the major reported that its total lending book grew 5 per cent year on year to $824.8 billion.
Westpac’s Australian mortgage portfolio grew to $510.2 billion, up 3 per cent from $495.2 billion in the prior year period (1H24).
When excluding the RAMS portfolio (which is no longer accepting new loans amid ongoing regulatory investigations and court cases), Australian home loan growth was up 5 per cent (0.9 times APRA system) to $484.6 billion. This was mainly in variable-rate owner-occupied mortgages.
Total mortgage flows were $54.8 billion. The share of new mortgages originated through the broker channel – which now writes more than three-quarters of all Australian home loans – increased over the half to 67.5 per cent (up from 61.4 per cent in 1H24).
As such, the proportion of all mortgages written through the proprietary channel dropped to 32.5 per cent – a new record low. Given the shrinking volume of loans written by the direct channel – just under 47 per cent of the group’s total loan book has been originated through proprietary channel (down from 49.4 per cent in 1H24), as brokers continued to gain more share in home loans written.
Westpac backs artificial intelligence (AI) for brokers
Speaking on the role of brokers at an investor briefing on Monday (5 May), Anthony Miller, who became Westpac CEO in December, said: “Mortgage brokers are important partners. To support them, we’ve halved the time to decision since 2023 and continue to remove pain points for faster loan decisions.
“We’re also embracing AI through our AI accelerator platform. In mortgages, we’re using it to improve processes and communication. The virtual AI assistant answers process and policy questions for our people, saving significant time and allowing them to respond faster to our customers.
“Meanwhile, Gen AI is being used to complement the expertise of our 800 assessors by processing documents, summarising key information in broker applications. It ultimately speeds up approvals for customers. While AI is surrounded by hype, its true value lies in delivering sustainable productivity gains and cost savings, which can take time to materialise. It’s early days, so we will measure the benefits of each test case to make sure we make informed decisions on further investment to support service excellence.”
Delinquencies drop
Overall, 68.1 per cent of Westpac’s Australian mortgage portfolio was for owner-occupier loans by the end of March 2025 (up from 67.8 per cent in 1H24), while investment property loans made up 31.0 per cent.
First home buyers – which have been dwindling in number amid high house prices and serviceability constraints – made up 12.2 per cent of its total mortgage portfolio – and around 11 per cent of new flows.
Mortgage delinquencies and impairment charges remained low for the period, Westpac said.
Australian mortgage delinquencies (90 days or more) dropped to 0.86 per cent from 1.12 per cent in September 2024, partly reflecting improved customer resilience. Meanwhile, 30-plus day delinquencies dropped from 1.82 to 1.50 per cent.
During the results presentation on Monday, Westpac chief financial officer Michael Rowland said there had been a decrease in mortgage arrears and stress across most of the lender’s business segments, noting the “continued improvement” in 90-plus day mortgage arrears.
Commenting on the February rate cut by the central bank and its impact on Westpac customers, Rowland said: “The fixed rate nature of the mortgage market means rate relief is taking a bit longer to benefit customers and economic conditions are somewhat weaker.”
Looking at the half year ahead, the CFO said: “Heightened volatility makes it difficult to provide a detailed outlook... What I can say is that our economics team is forecasting loan growth of five to six per cent this calendar year in Australia and for official interest rates to decline to 3.35 per cent by the end of 2025.”
CEO Miller said that mortgage offsets increased by $5 billion as new lending was “almost exclusively in variable rate mortgages and customers brought other savings with them as they shifted from fixed to variable rate loans”.
“We are now well past the peak of fixed to variable rate mortgage switching, with the portfolio now 95 per cent variable rate,” he said.
The results come amid a swathe of leadership changes at the major bank.
Westpac recently announced that its group executive for customer and corporate services, Carolyn McCann, would become acting CEO for the consumer division from 12 May, taking over the position from outgoing chief Jason Yetton.
The bank also welcomed long-serving ING Australia (ING) veteran Ray Esho to its residential broker team as its new state general manager, mortgage broker distribution for NSW/ACT.
Esho – who began in his new role on 28 April – takes over the position left vacant by Sarah Willsallen following her promotion to the head of broker distribution position in February.
[Related: Westpac announces new head of consumer bank]
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