Credit demand lowest in 40 years: Cummings
By
Adam Smith
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7/07/2011 6:30:00 AM
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8
comments
Demand for credit is at its lowest for 40 years, and lenders will have to make aggressive rate moves to remain competitive, CBA's Kathy Cummings has said.
Cummings, the bank's executive general manager of third party and mobile banking, has told Australian BrokerNews credit growth is the slowest in decades, and lenders will have to fight over a tight refinancing market.
"We are experiencing the slowest credit growth in the home loan market for 40 years, and with a decline in demand for new mortgage lending, there is likely to be a resulting pressure on refinance offers as well as a highly competitive rate environment," she said.
Bankwest head of specialist lending Ian Rakhit agreed, and said well-funded banks are fighting to gain or defend market share. He told Australian BrokerNews banks and brokers could use the lull in borrower activity to examine and fine-tune efficiencies in their loan processes.
"Banks and brokers are looking to be even more efficient, and so now is the time for us all to examine how we do business and whether that is the most cost efficient way. Quality of application submission remains very variable which adds time to both broker and bank in the transaction with more frequent customer interactions required. A fully completed application requires minimal touches for all of us which saves time and money and gives a quicker approval to the customer," Rakhit said.
Along with improving efficiencies, Cummings said brokers will have to focus on referral relationships as enquiries become less frequent.
"Brokers who have key strategic partners and solid referral sources such as real estate agents, accountants and financial planners will be in a position of strength," she commented.
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Latest Comments
Total:
8
comment(s)
Ozboy on
07 Jul 2011 11:47 AM
So I wonder if this will lead to the CBA removing it's minimum submissions? Interesting times.
Gazman on
07 Jul 2011 12:15 PM
" lenders will have to make aggressive rate moves to remain competitive" I trust Kathy is referring to reductions in rates to win customers and not increasing rates to win profits for the bank???
Whistleblower on
07 Jul 2011 12:20 PM
Decreasing Mortgage Managers
Decreasing Mortgage Brokers
Decreasing Home Building Approvals
Decreasing LVRs
Decreasing FHOG applicants
Decreased Retail Sector Spending
Growing National Savings
Killing competition via stealth(i.e.NCCP The Act)
MFAA FBAA decreasing membership base.
Seriously, does anyone really need any more of a tip..... this industry is baked!
I think you should all Google the basic 'industry lifecycle model' ...... and seriously ask yourselves, what stage is this industry currently in... it might help you re-frame and re-adjust your next career choice.
Google it... now !
King Wally on
07 Jul 2011 12:47 PM
Unfortunately there may be some truth in what "whistleblower" is stating. The majors have played this govt, they are now all looking toward expanding in Asia. It's like "Australia is done, we've got our monopoly back, lets focus on Asia, go global loose a heap of money and come back with our tail between our legs"
sidbroker on
07 Jul 2011 04:50 PM
WOW, Whistleblower you are close to the mark. BUT NCCP ACT OF 2009 which kicked in January 1st 2011 is a BLACK DAY in our great Nations history. We can survive the rest of what you have pointed out BUT i cannot see how we can move forward as a Nation under the CRIPPLING RESTRICTIONS and REGULTIONS of this IRRESPONSIBLE ACT. and CRIPPILING ACT. IT IS SENSELESS AND COMPLETELY DESTRUCTIVE.
James Santo on
08 Jul 2011 11:08 AM
Still the bleeting continues. The days of providing no value by brokers are gone. There is a reason why they are call brokers its because you end up broker after dealing with one. The 1.4's are gone the ridiculous trails are gone now you can work for your money and provide some actual value
sidbroker on
08 Jul 2011 01:39 PM
Hello James, Are you really still making your foolish statements. Didn`t you get the message clear enough last time.
Spinner on
11 Jul 2011 10:53 PM
Whistleblower.
Focus on the positives:-
Mortgages rose 4.5% for May
NCCP has effectively provided a barrier to entry to mortgage broking.
Banks offer a monoline products
Banks have some good, lots "OK" staff.
Consumers like choice
Competitive strategy suggests fims in oligopoly fight for market share to maintain earnings. Al la discounting to stay.
2 years ago I was cooked. Lenders tried to find ways to decline a loan. I stayed in the ring, and now they want my good customers again
Upside is all I see!!!