Australia’s banks continue to dominate lending, with new data revealing they have once again increased their market share.
According to RFi’s Australian Mortgage Market Wrap, the banks managed to grow their market share from 92.5 per cent in February to 92.7 per cent in March.
The big four banks, however, experienced a slight dip in market share over the same period, with a drop from 85 per cent to 84.8 per cent. According to the report, this was due to a 0.1 per cent decrease in market share of owner-occupied loans for ANZ, CBA and the Westpac Group.
Despite the banks’ continuing dominance, FAST chief executive Brendan Wright told The Adviser that the non-bank sector continues to play a vital role in the third party distribution channel.
“The non-banks provide genuine competition and options for brokers to provide to their clients,” he said. “They play a key role in catering to niche markets. Traditional banks can’t cater to everything and miss some opportunities. Brokers are keen to have access to the types of products and services that non-banks provide for their clients.”
Vow Financial’s chief executive Tim Brown agreed, but said the world economy would need to remain stable for the non-banks to increase their market share.
“There’s always the possibility that the non-banks could return to their pre-GFC market share levels, but I think general funding levels in the world have to stay where they are now – reasonably stable – for this to occur.
“We saw another upheaval in January last year where there was talk about the collapse of the euro and that really makes it difficult for the non-banks to compete price-wise. It makes wholesale funds very dear for them.”