Big bank accused of lowering lending standards

by AB04 Nov 2013

ANZ has been accused of lowering its lending standards, with major bank rivals claiming it is ­taking on extra risk to win new business customers.

According to the Australian Financial Review (AFR), NAB CEO, Cameron Clyne, claimed last week that at least one ‘unnamed’ competitor was weakening its credit standards after the major lender’s market-leading business bank lost market share.

Sources at two banks have both told the AFR that ANZ is acting the most aggressively in the business lending space.

“Conditions in the market are resembling pre-GFC appetite for risk,” said one source.

“We’ve seen ANZ in particular be very aggressive on pricing and credit terms in the SME business market, particularly for commercial real estate.”

APRA and the RBA have both issued recent warnings to banks, telling them not to take extra risk in a low interest rate environment where demand for business loans remains subdued.

However, ANZ CEO, Mike Smith, says the accusations are untrue.

“We haven’t lowered our standards, in fact over the last few years we’ve maintained credit standards very well,” Smith told the ABC on Sunday.

It is understood ANZ called in an external auditor earlier this year to conduct a review of its loan book.

ANZ chief risk officer, Nigel Williams, told analysts at its profit briefing last week that the bank had conducted a review by state and by business sector and was aware of the claims being made by its competitors.

“The new business that’s come on in that commercial and corporate business is the same or better quality than our existing book,” he said.

COMMENTS

  • by Dinsdale 4/11/2013 8:58:22 AM

    I have to laugh, only last week , I read an article that banks were too conservative in their lending, and need to be more flexible to encourage borrowing , particularly 1st home buyers and business

  • by Rubbish 4/11/2013 9:37:41 AM

    Sounds like sour grapes.

    Maybe if the other 3 Majors treated Brokers as well as ANZ; then they'd attract more business deals through our channel as well; and then wouldn't have to whinge when their competitors outperform them.

  • by SA 4/11/2013 11:05:56 AM

    Client of mine had $597 default less than two years, spoke to homeside BDM says can't be done. Client went to NAB branch in Newtown and it was done easily. Its NAB who needs to pick up the game.