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ASB regains market share and sticks with commission model

ASB has picked up its home loan lending volumes to be in line with market growth after losing market share for nine consecutive quarters.

Wednesday, February 10th 2016, 6:50PM

Previous results showed that ASB was lagging behind other banks in home loan market share, however that changed, particularly in the final quarter of 2015.

The bank said yesterday that in the six months to December home loan growth was in line with the market, rising 8% to $45.6 billion.

Chief executive Barbara Chapman says ASB's pick up in market share was "probably not anything we did differently, rather different competitor responses."

ASB's home loan lending strategy is "targeted growth and keeping a steady hand through the mortgage market," she says. "Where we are is a pretty comfortable spot."

Like other banks ASB is seeing a customer preference for fixed rate loans in the current low interest rate environment.

She says there has been a lot of growth in the Auckland market with house price inflation running at more than 20% last year. However, the bank's economists forecast Auckland house price growth will be between 2-4% this year and the regions will be stronger.

"We have seen some reasonably strong slow down in growth in Auckland market," Chapman says. "We are not expecting prices to decrease but they are not going to grow as much as last year."

While ASB is strong in the Auckland market Chapman says it also does well with home loan lending south of the Bombay Hills. She says its home loan market share out of Auckland is higher than its main bank market share, which covers general banking products.

Chapman says ASB will "take a competitive position but be very measured and level as we go through this part of the market."

ASB doesn't provide a break down of loan origination through its three channels (branch, mobile managers and brokers) although ANZ, Westpac and BNZ have done so in previous results. However, Ian Boyce, who is ASB’s general manager business banking and specialist services, says brokers are still an important channel and provide consistent volumes of business.

He says ASB were the first into the third party distribution market and continue to support it.

Ever since Westpac reintroduced trail commissions and BNZ re-entered the broker market with a trail commission model, the question has been will other banks follow?

Boyce says ASB, which pays up front commissions, is "happy with the way things are going."

"We're quite comfortable with where we are at the moment.”

He says ASB isn't planning to introduce trail commission and says that trail is "not right for everyone."

ASB, he says, will keep being consistent and doing what it has done for the past 20 years in the broker channel.

Tags: ASB Barbara Chapman Mortgage Advisers

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Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 15 November 2019 4:16pm

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