Non-major grows resi mortgages by 18%

by Miklos Bolza11 Aug 2017
AMP Bank has reported growth in its residential loan book of 17.8% between the first half of 2016 and the first half of 2017.

In the AMP group’s half yearly financial results released yesterday (10 August), residential mortgages in the company’s banking division rose from $15.4bn to $18.2bn in the 12 months prior to 30 June this year.

The lender’s total loan book stood at $18.8bn, an increase of $1.7bn during the first half of this year. This represented an increase of 17% on 1H16 and 10% on 2H16.

This growth was driven primarily by owner occupied lending with the bank’s investment and interest only lending segments constrained by APRA’s regulatory requirements.

“The market remains competitive with increasing regulatory requirements particularly on investor and interest only mortgages. For this reason, we expect to see some moderation in the lending market in the second half of the year as the industry adjusts to the new regulatory settings,” AMP CEO Craig Meller said.

AMP Bank originates home loans through both the broker channel and its AMP aligned adviser network. Loan portfolio growth through the latter increased from a 2% share in 1H16 to a 6% share in 1H17.

Other significant figures from AMP Bank saw the existing business weighted average loan to value ratio (LVR) drop from 68% to 67% and the 90+ day mortgage arrears fall from 0.51% to 0.48%, both between the first half of last year and the same time period this year.

Operating profit after income tax for AMP Bank increased from $59m to $65m in the 12 months prior to 30 June 2016 (an increase of 10.2%).

“We’re pretty happy with the bank’s performance in the first half and we’re confident that we’ll deliver the growth this year to meet our strategic ambitions for the business,” Meller said.

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