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According to the Australian Finance Group’s (AFG) latest Mortgage and Competition Index, which involved a survey of its broker network, the broker market share of the big four banks have headed in opposite directions.
Over the third quarter of 2019 (3Q19), Westpac and its subsidiaries (St. George Bank, Bank of Melbourne and Bank SA) reported the sharpest increase in market share among the big four banks, jumping by an aggregate of 21.1 per cent, from 18.9 per cent as at 31 December 2018 to 23 per cent.
The Commonwealth Bank of Australia (CBA) and its subsidiary Bankwest, also reported strong growth, with the group’s share rising by an aggregate of 11.2 per cent over the same period, from 20.4 per cent to 22.7 per cent.
Conversely, NAB and ANZ both recorded significant declines in their share of the third-party mortgage network.
NAB’s share of the market slipped by an aggregate of 32.5 per cent, from 7.5 per cent as at 31 December 2018 to 5.06 per cent, while ANZ’s market share dropped by an aggregate of 21.4 per cent, from 11.2 per cent to 8.8 per cent.
NAB’s current share of AFG’s broker network sits below that of CBA subsidiary Bankwest, and Westpac subsidiary St. George, who individually boasts higher market shares of 8.1 per cent and 5.6 per cent, respectively.
Bankwest’s performance was in line with new research from Momentum Intelligence’s Third-Party Lending Report, which involved a survey of over 1,000 mortgage brokers who voted Bankwest the highest rated ADI and the highest rated non-major bank.
The AFG index reported that, in total, the market share of the big four banks and their subsidiaries declined when compared to the previous corresponding period, with AFG brokers lodging 58.6 per cent of loans to the big four banks in 3Q19, down from 63.2 per cent in 3Q18.
Conversely, the market share of non-major banks increased from 38.6 per cent to 41.4 per cent over the same period.
Speaking on a Future of Broking panel hosted by ME Bank, the co-founder and managing director of Lendi, David Hyman, said that the shift in market share towards the non-majors was partly driven by their faster uptake of digital processes.
“Our customer base is more digitally native, we have quite a few more customers online than the offline channels,” he said.
“They are typically more receptive of some of the small lenders that have invested really heavily over the last five to 10 years in the digital platforms – lenders like ME, ING, Macquarie, etc. – where customers know they are going to get a great mobile app experience so they are more open to this.”
Mr Hyman added that the vast majority of home loans submitted by Lendi’s broker network are lodged with non-majors.
“Our broker share of the majors bucks the trend of the outstanding loan balance – 8/10 loans today are with the big four across the whole market, we fluctuate between 20-30 per cent of our loans land with a big four lender each month,” he said.
“The second side of that as well is because we are using technology that assists in the product selection and the lender selection process; the more lenders we have on our platform, the more likely we are going to be able to find a solution for a customer that is outside of the big four.”
[Related: Legislators cautioned as mortgage lodgements hit six-year low]
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