Advisers crack a major milestone

Mortgage advisers have cracked a major milestone and originated more than half of ANZ's home loans in the six months to March 31.

Thursday, May 5th 2022, 12:38PM 2 Comments

ANZ yesterday reported a net profit after tax of $1.096 billion and said that 55% of the loans written in that six month period came from mortgage advisers.

ANZ is the second of the big banks to report that more than half its loans came from advisers. Westpac said in the financial year to September last year "approximately 50%" of its loans came from advisers.

At the time it said this was "driven largely by our branch network being less available for customer visits as a result of Covid-19 lockdowns."

Generally, mortgages arranged by advisers represent about 40% of its total loan book. Westpac is due to report its half-year results on Monday.

Over at ANZ advisers have been steadily increasing their share of loans accounting for 39% of loans in the first half of 2020 to 55% two years later.

ANZ chief executive Antonia Watson said advisers were an important source of business for the bank. Like Westpac she said branch closures due to Covid were part of the reason advisers share of business had grown.

However, she also acknowledged lending was getting harder due to things like CCCFA, LVR restrictions and a changing housing market so borrowers needed to seek advice.

While advisers account for more of ANZ's business, its acutal volume of new loan accounts fell significantly from 42,000 in the previous six months to 31,000 in this current half year period.

On the flip side average loan size ballooned out from $358,000 to $453,000 in the same period.

Other key changes in its lending book included lending to investors dropped from 31% to 21%

More people were on floating rates with the percentage jumping from 13% to 21%. This was partly due to the success of the banks Blueprint to Build product which is a discounted variable rate for new builds.

While ASB had closed its equivalent product, ANZ was still offering Blueprint to Build and said it had lent "several billion dollars" under the scheme. The exact numbers were not disclosed.

Home loans now account for 70% of ANZ's total lending, up from 64% two years ago.

While ANZ slightly increased its market share in the first six months it significantly wrote more business than the market.

System growth, which is how much the overall market changed, was 3.4% in the six month period, however ANZ grew its book at 4.4%.  In the two previous reporting periods ANZ was very close to system growth.

Tags: Antonia Watson ANZ

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Comments from our readers

On 6 May 2022 at 1:24 pm OliverBroomfield said:
To assist with avoiding negative comments regarding this profit, it would be great to report that the $1b profit does not all go back to Aus. There are thousands of ANZ shareholders in NZ that will benefit from dividends. I'm not sure of the numbers but assume it will substantial.
On 11 May 2022 at 8:05 pm Andy the adviser said:
Thank you Oliver - well put.

Now it would be nice to see all the banks (not just ANZ) recognise the value that advisers are adding to the network (and their net worth), the increasing costs to advisers (in compliance, legislative and bank requirements), and the costs that we are reducing for them (marketing, rent for retail space, office costs, front-line staff etc).

If we look at overseas models, banks could easily cut cost further by moving to a more wholesale role, letting qualified financial advisers do the work while bank staff move to a more data-entry role.

It is possible that the latter has already started in some banks.

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