Westpac’s results more good news for advisers
Westpac has outdone ANZ and originated a greater proportion of home loans through advisers than its bigger rival. Meanwhile, BNZ has gone nowhere with advisers.
Tuesday, May 10th 2022, 6:59AM
As reported on TMMOnline last week ANZ originated 55% of its home loans through advisers in the six months to March 31.
Westpac has bettered that number and says that advisers accounted for 57% of its new loans in the first half of the financial year.
Meanwhile, in the same period BNZ’s origination through advisers remained unchanged from six months earlier at 34.6%
When it comes to borrowers first home buyers accounted for 20% of Westpac’s loans, which is a higher proportion than its total book size.
Owner occupiers accounted for 76% loans.
Westpac chief executive Catherine McGrath is candid and says lending to property investors plummeted due to the way it implemented new CCCFA legislation.
“Our settings weren’t quite right,” she told TMMOnline.
“It would be fair to say the way that we implemented CCCFA for investors wasn’t as good as ideal so we have made a number of changes to that in recent times.”
She says those changes have already been seen with an increase in lending in this area in the first months of the second half.
Applications are at “more of a level I am wanting to see.”
Due to reduced lending to investors Westpac’s home loan book grew at less than system growth in the six month period. It says home lending rose by 7% during the period.
With rising interest rates Westpac has changed its serviceability testing rate and is now using a number 2.5% above the retail rates a borrower is on.
As reported earlier Westpac's profits were boosted by the sale of its life business to Fidelity Life. While ANZ and BNZ reported increased profits, McGrath says Westpac 5% fall was due to its decisions on material provision write backs which has had not been completed and investments in technology, risk and compliance.
The investment in compliance is undisclosed but it covers CCCFA, new Basel requirements and Westpac's issues with its regulator the Reserve Bank.
McGrath says the result was solid and she was "Feeling quite good about the momentum we have on."
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