ANZ leads rivals in mortgage chase

ANZ continues to expand its mortgage book at the quickest pace of the big four banks, as the lender pumps more capital into its Australian business.

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.