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The major bank has grown new proprietary home lending by 25 per cent year on year amid a continued strategic refocus on first-party loans.
National Australia Bank (NAB) has hailed growth from proprietary channels and reaffirmed plans to focus on proprietary home lending to drive stronger returns.
The major bank first announced a greater focus on proprietary lending to improve shareholder returns last year, drawing criticism from brokers, with some expressing disappointment over the change in tack.
However, it has once again reasserted that it is pushing proprietary lending as one of its “key priorities” for the bank, alongside business banking and deposits.
Releasing its financial results for the six months to March 2025 (1H25) on Wednesday (7 May), the major bank reported that the share of mortgages originated through the broker channel had dropped 8 per cent to 59.6 per cent. The third-party channel had accounted for 64.6 per cent of new lending at the end of March 2024.
While NAB said growth in proprietary channels had lagged brokers in recent years, it added that there were “encouraging early signs” of a change, with a 25 per cent year-on-year increase in new proprietary mortgages (excluding NAB-owned UBank home lending) to $16.6 billion.
Indeed, the proportion of new lending written by the proprietary channel was up 14.1 per cent over the year (from 35.4 per cent to 40.4 per cent).
Overall, however, the proportion of broker-originated loans on NAB’s total Australian home loan portfolio increased, growing from 50.4 per cent of all home loans in March 2024 to 52.9 per cent by the end of March 2025.
Looking ahead, NAB said the onboarding of around 150 new proprietary home lenders during 1H25 was expected to support further improved performance.
To help maintain growth in proprietary lending, the bank flagged plans to continue investing in a simplified mortgage process to deliver fast home loan decisions and maintain investment in technology as part of its home loan strategy.
While releasing the half-year results, NAB Group CEO Andrew Irvine said: “We have three clear priorities – growing our core business banking franchise, driving our performance in deposits, and improving in proprietary home lending.”
The move comes despite a wider market trend, which has seen the share of mortgages originated through the broker channel rising to more than three-quarters of all Australian home loans.
In comments to The Adviser, NAB executive broker distribution, Adam Brown, said: “NAB continues to invest in both our broker and proprietary channels to drive growth, ensuring a balanced focus on both.
“Brokers are essential to bringing the best of NAB to our customers, and we’re committed to strengthening these relationships," he added.
“We aim to be the bank of choice for both broker-assisted and direct customers by investing in our proprietary franchise as well.
“This isn’t about choosing between proprietary and broker channels—it’s about being great in both – we remain here to support our brokers as we always have," he finished.
In an interview on The Adviser Podcast Network last month, Brown stressed the third-party channel remained important to the bank.
“Broker[s] will always be a really important part to the NAB ecosystem, as will our proprietary channel, and so we’ll make investments in both.
“And a big part of what I’m trying to do is ensure that our brokers know that we are there to support them and we’re not there with a preference of channel.”
NAB home loan book grows
The half-year results also showed that the major bank originated $41 billion in new mortgages (including limit increases and excluding redraws) over the half.
Its average new loan size was $599,000 in 1H25, reflecting higher house prices.
The vast majority (97.2 per cent) of new mortgages written over the half were variable rate loans.
Its Australian mortgage portfolio increased 4.3 per cent year over year to $359 billion from $344 billion a year before. The average loan size on its entire book also grew, up 3.4 per cent over the 12-month period to 394,000.
Its Australian home loan book is now made up of 65.7 per cent owner-occupied housing and 34.3 per cent investor-owned homes.
Commenting on the half-year results, Irvine said the bank was managing its business well in challenging operating conditions.
“NAB is in good shape, has a clear strategy and the business is well placed for the long term,” he said.
“We have plenty of work ahead, but NAB is tracking in the right direction.”
Looking ahead, Irvine said NAB’s business bank was a key differentiator in a highly competitive market.
“I’m pleased NAB is the biggest business lender and we are now the largest bank in business deposits and have improved our share of household deposits,” he said.
Its business banking loan book totalled $158 billion by the end of March 2025. NAB said it had 27.8 per cent of SME lending market share and 21.2 per cent of business lending market share.
“During the past six months, we have increased our share of SME lending. We want to grow this business, not simply defend it,” he said.
‘Unpredictability and volatility will persist’
Commenting on the economy, Irvine said that the first few months of this year had seen dramatic shifts in global economic policy.
“I expect unpredictability and volatility will persist for a while yet,” he said.
“Uncertainty might be uncomfortable for businesses and households, but overall Australia entered this period in good shape.
“Low unemployment, easing inflation and anticipated growth are all helping.
“This provides capacity for future cash rate cuts to help offset any further global headwinds.”
NAB is forecasting the Reserve Bank of Australia (RBA) to cut the cash rate by 50 bps in May, followed by 25 bps in July, August, November, and February.
[Related: Brokers surprised at NAB proprietary move]
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