Major vows push for mortgage book expansion

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Westpac plans to expand its mortgage book over the coming half-year period in an effort to address falling market share, according to the major lender’s CEO, Gail Kelly.

Kelly said the lender needed to up its lending to the mortgage market and says the lender is focused on an around-system growth approach.

“We tend to have a high-quality customer base and indeed a more affluent customer base and they’ve tended to put away as much as they possibly can, so we’ve had quite a big pick up over this last period, of accelerated repayments. That’s been the major driver there.”

“We think about it in a portfolio sense, so cross-brands business; what’s happening in Bank of Melbourne, RAMS, St George and Westpac. So in a portfolio sense I would like us to achieve a round-system growth. We had that big pickup…in 2009 and our mortgages took us up two percentage points. That’s still in an excellent state, so I’d like it to grow at a round-system growth.”

According to News Ltd reports, Westpac has had the most expensive advertised standard variable rate among the major lenders, at 6.51% and has lost almost 1% of market share in the past 12 months. The lender currently has 22% of the housing market, behind CBA (28%), but ANZ and NAB are reportedly gaining ground.

But Westpac senior media relations manager, Danny John, says the lender maintains a competitive advantage by offering significant discounts to the majority of its home loan customers.

“Everyone’s been bringing their fixed rates down, but we’ve been targeting certain areas…As we do make clear, when people look at the headline rate, most are actually paying 5.81%. So you’ve got that one element. At the moment though, in market, we’ve got a 1% discount; we’re at 5.51%. So if, for instance you’re looking to borrow a home loan of about $500,000 you get 1% off as a new borrower. For customers borrowing between $250-500,000, you’re getting a rate of 5.61.”

Kelly says she’ll be happier if it’s closer to system for the second half overall across all the Westpac brands.

 “But you won’t find it’s going to be the same in each brand – that’s the benefit for us of having several brands.  We think we can pick up growth a little.”

  • NP on 7/05/2013 11:50:31 AM

    Until Westpac revises it's commission AND clawback policies then they deserve to be shunned by the 3rd party channel. All take and no give makes Westpac a lender of last resort for my business

  • Greg of Perth on 6/05/2013 2:35:33 PM

    Agree with you Monty.
    Too many brands and non that really appeal. Strategic blunder me thinks.

  • King Wally on 6/05/2013 2:34:03 PM

    Agreed, just like NAB too many brands all working at the margin. It has been a very "scatter gun" approach, in the main WBC is the biggest player in the offshore borrower markets, they've missed mainstream the past 2 years.

  • Monty of Perth on 6/05/2013 1:46:41 PM

    Too many brands. Look at NAB with about five all competing or trying to and the result is undercutting just to write business. Poor strategic effort really.
    Maybe Westpac should lift their offering to Brokers to match others making a level playing field or are they that sure business will just be given to them by the Third party channel.
    Not too sure about that one.

  • Aspire Lending on 6/05/2013 12:36:10 PM

    What about the Manila hotline, even India puts them to shame!!

  • Perth Broker on 6/05/2013 12:31:37 PM

    Worst service of all the lenders; terrible commission rates; high interest rates; third party channel conflict - need I say anymore.

    Look inside their own backyard before they start appealing to the brokers to help grow their business - remember these are the same broker they virtually told to get lost in 2009.

  • Mark Perth on 6/05/2013 12:05:53 PM

    Westpac actively try to poach our clients after settlement, worst commisssons, rates not flash I certainly use them as a lender of last resort as do my team, they need a complete turnaround of thier strategies towards Brokers to gain any business out of my office

  • noelene on 6/05/2013 12:01:26 PM

    haven't been accredited with them for years due to the fact they want us to keep paying for accreditation and the above.

  • Terry on 6/05/2013 11:59:29 AM

    I think Westpac is getting what it pays for from brokers. Until that changes expect more of the same.

  • Perth Broker on 6/05/2013 11:58:26 AM

    Worst service of all the lenders; terrible commission rates; high interest rates; third party channel conflict - need I say anymore.

    Look inside their own backyard before they start appealing to the brokers to help grow their business - remember these are the same broker they virtually told to get lost in 2009.

  • Moonae on 6/05/2013 11:55:15 AM

    Is it that time already? Like clockwork, deliberately trash the broker distribution channel to the ground for a few years then when you feel like it turn the loving on again and tell brokers you hear us and our concerns and we want to win you back. It is quite tedious really. Watch now as CBA drops the ball and targets its margin and takes on the bad cop position as Westpac emerges again. The banking oligopoly strikes again.

  • Sydney Broker on 6/05/2013 11:27:25 AM

    Well they were the first bank to cut brokers commissions and are still probably the worst paying.
    So until they sort that out I cant see why brokers would support them.
    It's not as though their pricing, products or service are anything special or not accessible elsewhere!

  • Broker on 6/05/2013 11:25:54 AM

    Well that will certainly be a task if they are relying on Brokers....

  • Barney on 6/05/2013 11:25:24 AM

    Well they were the first bank to cut brokers commissions and are still probably the worst paying.
    So until they sort that out I cant see why brokers would support them.
    It's not as though their pricing, products or service are anything special or not accessible elsewhere!

  • Greg of Perth on 6/05/2013 11:22:02 AM

    Too may brands equals too many cooks in the kitchen, perhaps may cause confusion over many aspects from pricing to product range and availability?

  • PeterT on 6/05/2013 11:20:07 AM

    Westpac is reasonably compeditive for the low end of the market as indicated. What they're hiding is that that it's at the cost of existing customers not getting the 1% discount.

  • Wozza on 6/05/2013 11:20:02 AM

    Worst interest rates, worst commission rates - now that's a great combination to build your business from!!

  • Keith B on 6/05/2013 11:19:30 AM

    A review of the commission payments would go a long way to goal achievements!

    Westpac were of course the first to cut commisisons during the GFC and didnt care too much about the impact to its 3rd Party Channel and survival of their loyal referrers!

  • Brisbroker on 6/05/2013 11:17:43 AM

    Flagging market share may have something to do with highest SVR, lowest UF comm rate and biggest channel conflict. I would assume they would be addressing these 3 areas in their effort to increase market share?

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