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ANZ's Elliott voices concerns over credit controls

ANZ Banking Group chief executive Shayne Elliott has called for more clarity on responsible lending obligations, stating risk aversion has "infected" the banking system.

Wednesday, August 14th 2019, 3:05PM

Elliott, speaking at a conference in Australia earlier this week, said the scrutiny placed on lenders following the Royal Commission had affected banks' credit decisions. 

He said responsible lending laws in Australia were "a little bit grey" in their language. The laws stipulate banks must take "reasonable steps" to make sure loans are "not sustainable".

The ANZ boss said there was a "risk-aversion" among Australian banks, which had "infected" most banks.

Elliott told the Aussie Home Loans 2019 Imagine Conference in Sydney: "I’d say the pendulum is swinging back, we’re becoming a little bit more normalised … but we’re still a long way from where we need to be. What we need is clarity. We want greater clarity from the regulators about that definition." 

ANZ Group's mortgage book has contracted over the past year after the bank targeted lower-risk borrowers.

The influence of Australian regulators is widely believed to have an impact on New Zealand lending behaviour, with all of the big four lenders Aussie-owned.

In the wake of falling house prices, the Australian Prudential Regulation Authority relaxed serviceability rules for mortgage lenders. Lenders that were previously forced to test borrowers on a minimum 7% rate are now free to set their own servicing rate.

Westpac and ANZ have cut serviceability rates in Australia from 7% to about 5.5%-5.7% since the APRA move, but advisers say the shift is yet to have a meaningful impact on New Zealand's big four.

 

 

Tags: ANZ APRA Aussie Home Loans Royal Commission Westpac

« Campbell leaves Astute FinancialHeartland Group lifts annual profit 9% on reverse mortage and other lending growth »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
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 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.15 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

Last updated: 1 October 2020 9:07am

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