The Bank of New Zealand hasn’t done anything normal in the home loan market for many years; and it doesn’t seem to have changed its ways recently.
The bank created headlines a number of years ago with its “Unbeatable” campaign. During this campaign it was the market leader pushing fixed rates, particularly in the two year space, down.
Part of the driver for the campaign was its decision not to distribute its home loans through mortgage brokers, even though brokers grew to control 40% of the market.
The logic for this move was from what you could call a domestic between the bank and brokers where it wouldn’t allow them to sell its popular Global Plus loan product which offered borrowers Air New Zealand Airpoints dollars.
Since then the bank has relied on its own mobile managers and branch staff. It claimed that these channels of distribution were more cost effective than brokers.
Well how things change. Last week all the chatter during the tea breaks at this year’s NZ Mortgage Brokers Conference in Wellington was about BNZ sacking all its mobile managers.
The bank has confirmed this to Mortgagerates.co.nz, but the reasoning is not so clear.
One of the theories is that the bank may replace its mobile managers with brokers. A second is that the bank’s parent, National Bank of Australia, has just bought the Challenger mortgage business. Challenger owns a group called PLAN which operates in New Zealand.
Maybe the bank will use all the PLAN brokers instead? However, PLAN says that isn’t part of the plan.
The question is what does BNZ intend doing in this space? For years it has aggressively chased market share, and its mobile managers are a key part of that programme.
The answer appears to be that BNZ is pulling back in the home loan market and will leave it to the other banks to fight for business.
It does seem an odd move. One thing that borrowers which seems likely is that the bank won’t be out there leading the market down with its rates. Or maybe it will be super-aggressive in cutting its rates to get customers into the branches?
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