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ANZ has reported for the period ended 30 June 2023, its loan book increased by 2 per cent, amounting to $6 billion, which in turn raised its net loans to $307 billion.
This surge in lending activity was primarily driven by an increase in owner-occupied loans with principal and interest (P&I) payments, which rose by $4 billion to reach a total of $204 billion.
Additionally, investor loans saw growth, reaching $91 billion and experiencing a $2 billion increase compared to the figures reported in March 2023.
During the quarter, the bank recorded a noteworthy $12 billion in new loans.
However, it acknowledged a deceleration in home loan lending.
The bank also noted a slight rise in residential mortgages categorised as having ‘exposure of default’.
Furthermore, the bank’s data revealed that $8 billion worth of fixed-rate loans were set to expire by the end of the year, with an additional $12 billion already expired in the third quarter of 2023.
Looking ahead, the bank’s forecast for the first half of 2024 anticipates an expiration of $24 billion in fixed-rate loans, followed by an estimated $11 billion in the second half of the same year.
While the central bank has tipped 1 million borrowers are left to roll off their record-low fixed-rate loans over the next 18 months, the risk of defaults has remained low.
The Reserve Bank of Australia (RBA) tipped borrowers were aware of the impending change and had taken preparatory measures.
ANZ chief executive Shayne Elliott, while addressing the House of Representatives during the review of Australia’s major banks, agreed that borrowers transitioning from fixed-rate loans to higher rates seem to be handling the change better than expected.
Despite facing larger increases in home loan payments, these borrowers are reporting lower stress levels, he noted.
“The reason for that, and even though it’s counterintuitive because they’re the ones having the biggest increase in home loan repayments, is they’re prepared for it, they know it’s coming,” Mr Elliott said.
Mr Elliott further stated that the banks, such as ANZ, spoke to customers well in advance of the cliff, allowing people to modify household budgets to ensure they were able to continue to meet payment obligations.
The overall trend across Australia’s banking landscape showed growth in loan books, with the total loan portfolio of authorised deposit-taking institutions (ADIs) expanding to over $2.1 trillion.
Notably, in May 2023, Australia’s banks collectively added an extra $8 billion in mortgages, leading to a cumulative loan book of over $2.1 trillion.
Owner-occupier loans experienced a 0.57 per cent increase, reaching $1.42 trillion, while investor loans saw a 0.29 per cent growth, totalling $685 billion.
Overall, the combined mortgage book of Australian ADIs rose by 0.48 per cent to reach $2.10 trillion.
[Related: Fixed rate borrowers less stressed than others: ANZ]
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