Non-majors getting skinny as big four bite off even more market share

by AB16 Apr 2013

Australia’s big four banks and their subsidiaries have taken advantage of improved pricing conditions - and their significant balance sheets - to seize further market share from non-major lenders, according to AFG.

The aggregator’s quarterly Competition Index shows the overall share of loans processed by the company for major lenders increased from 75.7% in September last year to 79.4% last month.

Driving the market share increase was the big fours’ success in out-pricing their much smaller rivals in fixed rate loans, a product category that’s soared in popularity in recent months. Major lenders accounted for 76.4% of all fixed rate loans in September last year and last month that share had risen to 84.5%.

Particular winners were ANZ, which saw its fixed rate loan share rise from 8.7% to 15.1% in this period, Bankwest, which increased from 1.2% to 5.0% and CBA, which grew from 18.0% to 21.1%.

Mark Hewitt, general manager of sales and operations at AFG, says the scale of the major lenders gives them an inherent advantage when sourcing funding.

“As the figures show, they’ve been able to leverage that advantage to the point that they now account for four out of every five new home loans overall. While this is good news for the majors, it’s bad news for consumers who are deprived of the more competitive pricing they would enjoy if we had the same levels of competition seen in other developed economies.”

Major lenders have made especially deep inroads into the first home buyer market, where non-majors - some of which specifically target this group (such as Keystart) – have traditionally been strongest. Majors had 74.4% of the first home buyer market in September, a share which grew to 77.9% by March 2013.

CBA, established as the dominant player in the sector, saw the market share of subsidiary Bankwest almost double from 5.4% to 10.6% in the same period, delivering CBA group a collective 35% share of the national first home buyers’ market.

Among the non-majors, over the past twelve months, Macquarie has strongly grown market share (from 1.6% in April 2012, to 3.8% last month) as has ME Bank (from zero to 2.1% share). Both Suncorp and ING saw their share of home loans processed by AFG decline.


  • by Brisbane Broker 16/04/2013 9:26:59 PM

    I put an 95%LVR + MI Non genuine savings to CBA (the FHB lender that has so much of this market), was advised declined due to credit score.No one could give me reason apart from 'computer says NO'. Lodged following day with Suncorp and 4 working days later received Formal approval. Will CBA keep their prime position with this style - NO. Will Suncorp and alike bite back -YES. Where do you think I will be taking my First timers now (even with lower LVRS') Lets support the lenders that support saying Yes. Viva Le' difference.

  • by Bondi Broker 23/04/2013 8:56:03 PM

    Have you installed the CBA software on your system? The auto decline would have shown up right away and you could probably work out what was wrong. I do agree though Suncorp does go the extra distance in helping to submit deals and is great for first time brokers