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Mortgage brokers key channel for profit-surging banks: KPMG

Mortgage advisers are predicted to continue to be an important source of business for Kiwi banks as they soar to new heights of profitability.

Wednesday, September 19th 2018, 6:00AM

KPMG has today released its latest Financial Institutions Performance Survey, for the June quarter.

It showed banks bounced back to profitability after a drop the previous quarter.

As a sector, they made $1.424 billion in the quarter, a 14.6% increase after an 11.35% drop the three months prior.

The increase in profit can be attributed to an increase in net interest income of $48m and non-interest income of $77m, paired with a decrease in impaired asset expense of $116m and operating expenses of $7m, with only an increase in tax expense offsetting the growth in profit.

Loan growth across the banks continued at a steady rate, with Heartland marginally ahead of TSB for the quarter and with year-to-date growth of 12.28% and 13.61% respectively. BNZ, ANZ and CBA-owned ASB also experienced an upwards trend in loan growth for the quarter with growth of more than 1.5%.

Kensington said banks saw mortgage brokers as a very important source of that lending business.

There would be more scrutiny of the conduct of the channel as a result of the Australian Royal Commission, he said, and banks would want to ensure they had clear visibility of each deal.

But he said it was such a huge source of business for them that they would maintain the channel.

“They are a great channel fort the banks. Lots of New Zealanders don’t really know what they are doing. They want a house and they know they have to have a loan but hey don’t know how to go about it.”

An earlier KPMG report showed a surge of interest in non-bank lenders, as banks tightened their lending requirements. He said brokers had driven that.

Tags: banks KPMG

« How low could the OCR go?Reverse mortgages, motor, drive Heartland growth »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▲2.29 ▲2.69 ▲2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 ▲2.89 ▲3.29 ▲3.49
SBS Bank Special - ▲2.39 ▲2.79 ▲2.99
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.78 2.99 3.29

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