1 Comment 1 Commentby Jenny Ruth
This has included reducing the amount of information it needs to approve a loan, increasing staff training and putting staff who can approve mortgages with up to 90% loan-to-valuation ratios (LVRs) into most branches and business banking centres, says Kerri Thompson, managing director of the bank's retail division.
"We've done a lot of work on looking at all the questions we ask customers, looking at all the information, and working out which ones are best predictive of risk," Thompson says
That process has led the bank to winnow down the information it seeks to wanting answers on matters most indicative of risk, she says.
This has streamlined the process and means approval - or otherwise - is quicker.
"Some questions we were asking weren't really predictive of risk," Thompson says. Previously, the bank had been delving rather deeper than it needed to into the things their customers spent money on, information which didn't help it work out whether the customer could afford the loan.
But streamlining hasn't meant compromising on credit criteria. "We're really confident we're making stronger credit decisions," Thompson says.
While ANZ does do some lending above 90% LVRs, that's only where customers can demonstrate very strong serviceability.
That's because its in the 90% LVR-plus areas where many customers have gotten into difficulties..
Adverse financial impacts such as losing a job are much more affordable if the customer has greater than 10% equity, Thompson says.
Good and speedy credit decisions are particularly important in the Auckland market which is very competitive, she says. If a customer plans to bid at an auction, they need to know whether they can afford to bid.
ANZ has been losing market share since its 2003 takeover of National Bank although it remains New Zealand's largest home lending bank by a significant margin.
Thompson says the bank is "very keen" to understand what's happening to its market share but "at the same time, it's not market share at all costs," she says.
"We want to make sure we're lending in all cases where we can see it's good business."
In trying to demystify the mortgage process, Thompson says ANZ has been running seminars for customers on matters such as bidding at auctions and building a new house and in some cases is getting 100 people attending.
Initially, these seminars were aimed at first home buyers but the bank has found a much wider range of customers, including property investors, have been attending.
The bank has also put mini-seminars on such matters as saving for a deposit, how much you can borrow, structuring and managing your mortgage onto youtube.
"We know one of the things people do when they're buying a home is search on the internet," Thompson says.
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With insights such as this ANZ market share should increase by leaps and bounds...