Macquarie confident it will avoid wrath of regulator

Speaking at an operational briefing following the release of its December quarter figures last week, Macquarie group head of banking and financial services, Greg Ward, said he did not believe the bank will be targeted by the regulator since it is “too small”.

Macquarie’s book was valued at $22.3 billion in December 2014.

"I don't think we are the target of APRA's announcement," Mr Ward said in reference to the regulator’s increased supervision of home lending.

In December, APRA announced that it would be “further increasing the level of supervisory oversight on mortgage lending” in a bid to “reinforce sound residential mortgage lending practices”.

The banking regulator said one of its “specific areas of prudential concern” is when lenders increase their investor lending by more than 10 per cent during a year.

While APRA said this does not necessarily indicate wrongdoing or warrant any action, it did state that investor growth above 10 per cent would be “an important risk indicator for APRA supervisors in considering the need for further action”.

APRA banking statistics for December 2014 show Macquarie Bank recorded a 75.2 per cent increase in investor lending over the preceding 12 months.

"We are looking to originate high quality mortgages at an appropriate return on equity,” Mr Ward said.

"Our growth will depend on margins and the way credit is being assessed,” he said, adding that he expects competitive pressure will moderate the bank’s mortgage growth over time.

At last week's briefing, the bank highlighted its ability to develop relationships with brokers and white label mortgage partners as a key strength.

Macquarie noted that its strong intermediary relationships were the result of “skilled BDMs with a high-touch approach”.

The lender remains focused on the broker channel, highlighting its further investment in Yellow Brick Road by supporting the acquisitions of Vow and Resi last year.

Macquarie also noted that it had entered into white label agreements with Mortgage Choice, Real Home Loans and Homeloans Ltd.