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Non-bank lending soars

Non-banks report record growth in New Zealand as retail banks maintain tight credit restrictions in the economic downturn. 

Wednesday, September 30th 2020, 8:42AM

Bank restrictions have led to a flow of prime customers to non-bank lenders, which are offering lower rates than ever. 

Resimac's head of New Zealand Luke Jackson said the company "was perfectly placed to service the market", and had grown its book by nearly 30%. 

"We haven’t had to slow down on lending volume or make any changes to credit policies this year," he said. "On an annualised basis, we’re running close to a 30% book growth, and we announced earlier this month that we’ve had a record number of settlements over the last six months."

"With banks being obligated to raise capital buffers, they’re continuing to focus on simple, low-risk transactions," Jackson added. "Advisers have realised that in order to get transactions happening, they need to use a wider range of funders, and thus they’re submitting more deals to non-banks. Any clients that need a bit of pragmatic thinking, or who don’t fit the automatic decision box of banks, are coming to non-banks."

Michelle Sargeant, national sales manager at Pepper Money, said her company had originated more than $100 million in loans in its first year in NZ.

"Non-bank lending has remained buoyant throughout this period because brokers are more aware of the innovative features that non bank lending provides to their customers, and are benefiting from the newer technologies non bank lenders like Pepper Money deliver," Sargeant said. 

Stephen Massey of Avanti said the past two months were "two of our biggest ever" for settlements: "Avanti Finance has certainly seen some of our highest levels of applications and new business over the last three months," he added.

Massey said banks conservative behaviour, and turnaround time struggle, play into the non-bank sector's hands.

"Avanti’s near-prime offering has increased our share and we have had great support from the adviser market. Lastly people are very keen to enter the market right now and looking for options, something Avanti can help with," he said.

 

Tags: Avanti non-bank lenders RESIMAC

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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 2.95 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
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
Kainga Ora - First Home Buyer Special - 2.25 - -
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
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 3.05 2.99 2.99
SBS Bank Special - 2.55 2.49 2.49
The Co-operative Bank - First Home Special - - - -
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 ▼3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.49 2.69 2.79
Median 4.55 2.94 2.99 2.80

Last updated: 23 October 2020 5:00am

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