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.”