Growth in broker loans outpaces proprietary channel for major bank

by Julia Corderoy03 Nov 2015
Westpac has reported a $24.8 billion increase in its home book, including its subsidiary St George, with the growth in the broker channel outpacing the growth in its proprietary channel.

According to the major bank’s full-year results released yesterday, Westpac increased its home loan book to $375.8 billion in the year to September 2015, a 7% increase from the previous financial year. Mortgage brokers accounted for $36.6 billion, or 47%, of new loans settled through the major bank over year. The proprietary channel settled $41.9 billion of new mortgage lending throughout the year.

However, according to Westpac’s results, brokers grew their share of new lending by 13% in the six months to September 2015, compared to the same period in the previous year. The proprietary channel grew its share by 12%.

Westpac’s general manager of third party distribution, Tony Macrae told Australian Broker that brokers are “fundamentally important” to the major bank.

“Australian retail was a key driver of performance of Westpac’s full year 2015 financial results, released [yesterday]. The broker channel is recognised as a fundamentally important channel. Responsible for 47% of new lending, third party is of critical importance to the Bank.”

As a result of APRA’s crackdown on investment lending, Westpac – which is Australia’s largest lender to investors – has decreased its investor property loan growth and increased its focus on the owner-occupied market. 

According to the results, Westpac recorded a 9.9% growth in investment loans in the quarter to September 2015, down from 11.2% growth in the quarter to June and 11.9% growth in the quarter to March. 

Investor property loans now account for 44.5% of the major bank’s total housing portfolio, down from 45.2% in FY2014.