Second banking tier "dead"
By
Larry Schlesinger
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5/11/2009 9:00:00 AM
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1
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Research group CoreData-brandmanagement has declared the second tier banking sector "dead" based on its declining share of the residential lending market.
It calculated that Westpac and Commonwealth Bank now hold nearly half of all outstanding residential lending by value (48.0%), and are gaining market share - this includes Westpac-owned St.George (8.2% market share according to 2009 annual results) and CBA-owned BankWest (3.2% according to 2009 results).
"The 'big two' will soon control more than half of all outstanding Australian mortgages by value, as market share continues to accelerate reaching 48.9% in September 2009, compared with 45% at the start of 2009", said Tony Crossley, CoreData-brandmanagement head of mortgages and insurance.
NAB and ANZ lag far behind the "big two" with just under 13% of the market each. Crossley said NAB was "addressing its poor mortgage market acquisition strategy though the purchase of Challengers broker channel, with ANZ more focused on Asian than local growth".
The next biggest lender outside of the major banks is foreign-owned ING Direct which has 3.39% of the market.
Of the remaining independent regional banks, Suncorp has a market share of just 2.79%, followed by Bendigo & Adelaide Bank which has 2.49%. Bank of Queensland, which does not use brokers to distribute its mortgages has 1.99% of the market. Citibank's share is only 0.89%
Crossley said regional banks had significant challengers in competing on either brand or price and were therefore providing no barrier to the 'big two' banks continuing to gain mortgage market share.
Collectively, the non-bank sector hold just over 10% all outstanding residential lending by value.
Related stories:
Mortgage book up 17% at Westpac - Annual results posted by Westpac today, which showed 17% growth in its mortgage book, have re-affirmed its status as one of the 'Big two' of mortgage lending
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OK We hear it on
06 Nov 2009 08:44 AM
just a quick comment , these research houses seem unable to look at history, when 2nd tier lending commenced in the early 70''s people said it had no future , it has declined due to cost of funds , when this alters , it will return , why , Aussies genuinely do not like the big four and given the opportunity , will deal with some one else. Alos if second tier nbanking is dead why cab The Bendigo community model and BOQ franchise models do so well right through the GFC . Seems to me a research house is looking for a head line again.