AMP loan book exceeds $23bn

Residential loan growth of “1.4x system” in a “highly competitive market” (as at 31 August) has increased AMP’s loan book by $0.6 billion to $23.3 billion in the third quarter of 2022, the bank has announced (21 October).

AMP Limited confirmed that its loan book result had been underpinned by continued strength in a deposit-to-loan ratio of 89 per cent. 

The bank has cited an overall “significant improvement” in cash flows as more customers choose to join or stay with AMP.

“Platforms net cash inflows increased to A$363 million in Q322 from A$205 million in Q321,” AMP reported.

“North inflows from independent financial advisers (IFA) [were] up 45 per cent to A$483 million on Q321, [which] reflects ongoing focus on strategic priority to increase IFA inflows.”

AMP chief executive Alexis George said: “We have made strong progress in the third quarter, which is reflected in the cashflows we’ve announced today.

“While challenging investment markets continued to have an impact on assets under management, we have seen a significant improvement in our cashflows as more customers choose to join or stay with AMP.

“Our bank continues to grow above system with both the loan and deposit books increasing in a competitive market.

“As homeowners begin to feel the impact of interest rate rises, our focus remains on supporting customers with competitive home loan and deposit rates, and maintaining our high-quality credit position.

“We’ve seen a reduction in cash outflows to other superannuation funds and we’re winning new customers on our North platform, which has continued to grow cashflows from independent financial advisers — a key strategic focus for AMP.

“In the fourth quarter, we have already launched our digital mortgage and unique-to-market retirement offer.

“These are important strategic deliverables that will support AMP’s longer-term growth and deliver on our purpose to help people create their tomorrow,” Ms George explained.

Business unit bigger picture

In addition to AMP Bank’s total loan book growing by A$0.6 billion to A$23.3 billion in Q3 22, total deposits increased by A$0.7 billion to A$20.7 billion during the same quarter, with a deposit-to-loan ratio of 89 per cent, up from 88 per cent at first half of 2022.

The majority of deposit flows were sourced from Platforms and customer deposits, with growth in term deposits replacing at call, driven by higher relative customer rates, AMP confirmed.

When Mortgage Business asked AMP what proportion of the Q3 loans were written by brokers, a spokesperson replied that AMP doesn’t report the split of broker vs direct flows for loan origination in its quarterly updates – only at half and full-year results.

Likewise, there’s “…not a lot of data we can share at the moment [on] the digital mortgage,” they explained.

A fully digital mortgage experience

AMP Bank mentioned its plans to develop a digital mortgage for retail customers, leveraging the lending platform of Australian fintech Nano, in May.

This was to accelerate bringing a digital offer to market, it explained.

AMP Bank’s solution aimed to offer a “fully digital mortgage experience” capable of providing an, “…unconditional approval for a residential home loan within minutes, subject to the customer’s circumstances,” it stated.

Since 2021, Nano had been offering a digital mortgage under its own brand, but in this instance it would be funded and offered by AMP Bank.

At the time AMP Bank Group Executive Sean O’Malley said: “Customers increasingly need home loan application approvals at pace, to match the fast-moving nature of the real estate market.”

“Through our digital mortgage offer, we’ll reduce the time to unconditional approval for a residential home loan from days to hours, and in many cases, minutes.

“A fully digital mortgage offer will enable AMP Bank to better help customers achieve their home ownership aspirations, whether it is a home to live in or an investment property.

“By leveraging Nano’s market-leading platform we are embracing speed to market and the agility afforded by the partnership.

“It allows AMP Bank to accelerate its focus on growth through digitising customer experiences.

“The development of a digital home loan reflects AMP Bank’s ongoing strategic investments in digital technology to simplify and improve customer and intermediary experience,” he explained.

The digital technology is paperless, “…eliminating the need to upload financial statements,” and allows applicants to verify their identify using their mobile device.

The offer is available through AMP Bank’s website, initially for customers to refinance an existing home loan with another lender to the AMP Essential Home Loan, it stated (12 October).

The offer will extend to new loans and more fully featured products in 2023.

[Related: Repayment concerns mounting for Australians: AMP Bank]