ANZ leads rivals in mortgage chase
As ANZ, NAB and Westpac ruled off their annual accounts on Monday, new figures from the Australian Prudential Regulation Authority showed ANZ's home loan book grew by 7.1 per cent in annualised terms during August.
This compared with 5 per cent annualised growth for Commonwealth Bank and NAB, and 2.7 per cent for Westpac, according to brokers at Macquarie.
ANZ, the smallest home lender of the big four, signalled earlier this year that it would put more capital into the $1.2 trillion mortgage market as profit margins in its international business come under growing pressure.
As part of the push, the bank has lowered its standard variable mortgage rate to 5.88 per cent, equalling NAB as the big bank offering the lowest advertised rate.
Westpac, in contrast, has been consistently losing share in the lucrative home loan market this year, a trend analysts blame on its decision to offer the highest standard variable rate of the big four.
There were few signs of improvement for Westpac in the latest figures, despite its decision to out-cut the Reserve Bank in August with an interest rate reduction of 0.28 percentage points. It still has the highest standard variable rate of the big four at 5.98 per cent.
The numbers were published on September 30, which marks the end of the financial year for ANZ, NAB and Westpac.
The weeks leading up to the end of the period are often a time of heated competition for banks to sign up new borrowers, and this month the Reserve Bank has stepped up its warnings to banks to maintain "prudent" lending standards in the property market.
But other data published by the Reserve on Tuesday showed economy-wide credit growth remained relatively subdued in August.
The annual pace of housing credit growth edged up from 4.6 per cent to 4.7 per cent - still only slightly above a record low of 4.4 per cent.
Citi economist Paul Brennan said although new lending was picking up, it had not yet translated to credit growth because households were also exploiting low interest rates to pay off old debts quickly.
"So far at least it appears that the strengthening in the property market is being driven less by debt and more by cashed-up buyers," he said.
Frequently Asked Questions about this Article…
The article says ANZ's home loan book grew fastest among the big four, up 7.1% annualised in August. ANZ is putting more capital into its Australian mortgage business — a move investors watch because it signals management is prioritising domestic lending growth as international margins come under pressure.
According to the article, ANZ and NAB both lowered their standard variable mortgage rate to 5.88% and share the lowest advertised rate among the big four. Westpac has the highest standard variable rate at 5.98%.
Brokers at Macquarie reported ANZ grew 7.1% annualised in August, while Commonwealth Bank and NAB each recorded about 5% annualised growth. Westpac lagged, with 2.7% annualised growth for the same period.
The article notes ANZ — the smallest home lender among the big four — signalled it would allocate more capital to the A$1.2 trillion mortgage market because profit margins in its international business are under growing pressure.
The article says Westpac has been consistently losing home loan share this year and analysts link that trend to its decision to offer the highest standard variable rate among the big four. Even after cutting rates in August (out-cutting the Reserve Bank by 0.28 percentage points), the latest figures showed few signs of recovery.
The article explains the RBA has stepped up warnings for banks to maintain 'prudent' lending standards amid heated competition in the weeks before financial-year-end. That context matters because banks aggressively chase new borrowers at that time, but face pressure from regulators to avoid loosening credit quality.
Reserve Bank data in the article show economy-wide credit growth remained subdued in August and annual housing credit growth edged from 4.6% to 4.7%, still close to a record low of 4.4%. Citi economist Paul Brennan said new lending is picking up but hasn’t yet translated into higher credit growth because households are using low rates to pay down existing debts.
The article quotes Citi economist Paul Brennan observing that recent property strength appears to be driven less by new borrowing and more by 'cashed-up buyers' — people using savings or paying down debt with low interest rates. For investors, that suggests demand may be supported by buyer cash rather than rising household leverage.
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