Non-major market share almost at 35%

by Miklos Bolza21 Jun 2017
Competitiveness amongst Australian banks is heating up with the non-majors eating up a much larger market share.

The latest AFG Competition Index shows the non-majors picking up nearly 35% of total market share – a figure that AFG general manager of sales and operations Mark Hewitt says reaffirms the value that mortgage brokers provide.

“Mortgage brokers deliver true competition in the lending sector and provide real choice for consumers. If a lender is out of the market on service or price they will look beyond the majors to meet the needs of their client.”

The Index’s figures show market share slipping away from Commonwealth Bank of Australia (CBA) with overall share moving from 20.5% this time last year to 11.8% last month, Hewitt said.

“With CBA, AFG believes this is the result of a deliberate strategy to pull back from the investor and interest-only markets to meet the lending caps mandated by APRA.”

Combined with its subsidiary Bankwest, CBA’s total market share dropped from 25.5% to 15.5% in the same time period.

National Australia Bank (NAB) continues to increase its market share.

“NAB have benefited from their recent actions to align their broker products with their direct channels,” Hewitt said. “Until recently there was a difference between the products made available to their direct and broker-introduced customers which created confusion for borrowers.”

Westpac now has the greatest proportion of the fixed market amongst the majors, doubling its share from 10.98% this time last year to 22% at the end of May.

“Westpac subsidiary St George is also picking up market share of those seeking to refinance,” Hewitt said.

Last month, 34.95% of all mortgages lodged by AFG brokers went to the non-majors. With 39 lenders on the AFG panel however, flows of business to non-majors are significantly higher than in the broader lending market with non-majors holding 17% market share outside the aggregator’s channel.

“Suncorp is the big winner for the non-majors, picking up market share in the fixed rate, investor and refinancing categories,” Hewitt said. “Increased competition delivers value to the consumer. Many of the non-major lenders on our panel do not have a branch network. Without the competitive tension mortgage brokers bring to the market, prices would inevitably rise.”

Amongst the major banks and their subsidiaries, market share for all mortgages between June last year and May this year is as follows:
 
  June 2016 May 2017
ANZ 13.44% 15.80%
CBA 20.48% 11.81%
Bankwest 5.01% 3.62%
NAB 9.49% 10.80%
Westpac 12.41% 10.83%
Bank of Melbourne 3.00% 2.83%
Bank SA 1.19% 0.96%
St George 8.18% 8.42%
Major Total 73.21% 65.05%

For the non-majors, market share for all mortgages amongst the largest lenders for the past 12 months is as follows:
 
  June 2016 May 2017
AFG Home Loans 7.33% 7.68%
AMP 2.57% 3.16%
ING Direct 2.49% 3.49%
Liberty 1.86% 2.36%
ME 1.62% 2.61%
Macquarie 2.53% 2.50%
Suncorp 1.95% 6.67%
Non-major Total 26.79% 34.95%

Related stories:

Aggregator sets sights on $37m FY17 net profit

No peak to housing markets, say brokers

Awareness key barrier to SME lending growth

COMMENTS