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Bright outlook for non-banks

Non-bank lenders are on course to grow market share in mortgage and business lending, according to KPMG head of banking John Kensington. 

Wednesday, December 16th 2020, 8:25AM

KPMG's 2020 Non-Bank Financial Institutions Report reveals non-bank lenders recorded a 7.97% profit drop for the year.

The report doesn't include well-known privately owned non-banks in the NZ mortgage market, such as Resimac and Pepper Money, but includes the likes of Avanti, First Mortgage Trust and First Credit Union.

The finance arms of carmakers BMW, Nissan and Toyota are included in the report.

KPMG's Kensington said the profit drop could be viewed as a "false indicator", as companies with financial years ending earlier this year had made significant provisions for Covid.

The non-banks included in the report recorded a post-tax profit of $299.6 million.

This was "largely attributed to a collective drop in profit of 22.92% between those with balance dates in June and September". Growth in assets rose marginally by 3.95%. 

Kensington said the outlook remained strong for non-banks in the mortgage and SME lending space. 

"Anecdotally, we hear that they are experiencing growth, as banks have been less aggressive and taking more efforts to lend responsibly. 

"Banks aren't going to run the risk of getting into risky loans, and may even have to say no to some loans with a perfectly sensible back story. There will always be unusual deals like that, that can go to the non-banks."

He said ANZ's decision to limit investor lending to 60% LVR would lead to more business for non-banks. 

"Somebody that had a 32% deposit before could have walked in and got a loan but they might not be able to do that. That's attractive for non-bank lenders."

In business lending too, non-banks are poised to take more market share, Kensington said, as they are able to do deals without security, and make fast decisions.

"Non-banks are set up to make the business lending decisions. There's no shortage of opportunities coming to non-bank lenders," he said. 

Tags: Lending non-bank lenders

« Advisers react to ANZ's LVR decisionHow will 40% deposit requirements affect the market? »

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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 ▼2.89 3.25 3.39
ANZ Special - ▼2.29 2.69 2.79
ASB Bank 4.45 2.49 2.59 2.65
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.49 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.09 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 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.45 2.65
Kainga Ora 4.43 2.93 3.07 3.24
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.30 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 ▼3.20 ▼3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.99 3.09 3.15
SBS Bank Special - 2.49 2.59 2.65
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - - - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.69 2.79
The Co-operative Bank - Standard 4.40 2.99 3.19 3.29
TSB Bank 5.34 3.29 3.29 3.59
TSB Special 4.54 2.49 2.49 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 2.29 2.69 2.79
Median 4.54 2.93 2.99 2.97

Last updated: 20 January 2021 7:50am

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