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Non-majors bullish about the future

by Staff Reporter11 minute read
The Adviser

Jessica Darnbrough

Despite losing considerable market share to the majors during the global financial crisis (GFC), Australia’s non-major lenders are still in the game and are collectively confident that 2013 will be their year.

Speaking at a recent non-major roundtable hosted by The Adviser in Sydney, Macquarie’s Doug Lee said the bank was confident it could build off a good base in 2013 and “capitalise on a lot of growth opportunities”.

“We are very upbeat about the year ahead and believe there is some good growth potential in the non-major space. I see this year as the year that the non-majors can make a play for market share,” he said.

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His comments were largely echoed by Citibank’s Vibha Coburn who argued that the non-majors had been building momentum since the GFC and were now in the “right position” to capitalise on that momentum.

“During the GFC, the majors accounted for more than 90 per cent of the market, a figure they would like to retain,” she said.

“Australia’s non-majors have been working hard to build momentum in the lending sector and build strong relationships with the third party distribution channel. It has been a slow process, but I think we are all finally starting to see some momentum, and 2013 will be all about building on that.”

And while Ms Coburn believes there is still “a lot of work for the non-majors to do”, research from RFi shows the second-tier lenders are indeed “growing their share” of the lending market.

According to the latest Australian Mortgage Market Wrap, the majors’ market share has dropped to 85.2 per cent of all home loans written – down from the 90-plus per cent achieved in 2009.

Better yet, the Market Wrap found the non-majors increased their collective market share by almost 2 per cent between October and November 2012, with the overall share of Australia’s banks growing from 92.6 per cent to 94.1 per cent.

And, according to a recent straw poll conducted by The Adviser, this trend could continue throughout the year.

The poll, which surveyed the opinions of 212 mortgage brokers, found that a vast majority expect the majors’ market share to drop in 2013.

When asked whether or not the majors would lose share this year, 70.3 per cent said “yes”.

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