Market share gains haven't made up for declining profitability for mortgage brokers, a new report indicates.
The JP Morgan Australian Mortgage Industry report shows that the proportion of new loans originated by brokers has continued to climb.
The report indicated that broker market share was approaching pre-GFC levels of 45%. But while brokers are taking a greater share of the market, their bottom line has failed to benefit.
According to Fujitsu analyst Martin North
, broker profitability is down.
"Brokers are still doing reasonably well, but it's on a much lower volume. Therefore, the commission pools are much smaller," he said.
North said broker numbers are down, and suggested those remaining in the market are finding conditions difficult.
"A proportion of those we surveyed indicated they didn't have a very profitable business," he said.
The report has also revealed broker use by major banks. JP Morgan claimed Westpac was continuing to focus on proprietary distribution over broker use, while CBA
maintained its broker usage levels and ANZ
remained strong in the channel. NAB
, meanwhile, has seen its surge in mortgages underpinned by broker use.
"It has been NAB
whose growth rates are benefitting the most from reengagement with the broker channel," the report said.