Regional banks reap sharp broker share gain

by Mackenzie McCarty20 Sep 2012

Mortgage brokers delivered regional bank brands a windfall in key states in the June quarter 2012, propelling their market share higher at the expense of the major banks.

The latest data from MISC (Market Intelligence Strategy Centre), which collects data from regional and major lenders, as well as national and state-concentrated broker groups, found that regional banks triumphed in the June quarter 2012, garnering 37% of broker business nationally.

This was an increase on the 33% broker channel share regionals recorded in the 2011 June quarter, or a 12% jump year-on-year.

Overall growth came on the back of keen pricing, according to MISC, especially fixed itnerest rates.

MISC said regionals also engaged in more aggressive home loan discounting - which saw borrowers sometimes shave up to 100 basis points of advertised rates - and maintained their refinance cash-back switch programmes, while the majors withdrew them.

Queensland formed the vanguard of the regional bank revival, with combined share through brokers reaching 39%, up from 30.3% last year. MISC attributed the growth to competitive Suncorp pricing and and products, as well as upward broker commission adjustments.

Meanwhile, WA brokers maintained their strong regional bank support at 42.8% of all business, a slight dip from 44.3% last year, and NSW/ACT saw growth to 36.1% of market share.

The home of two strong regional bank brands, South Australia, went against trend, with regional market share dropping to 24.8%, from 29.8% in the same quarter last year.

"While BankSA matched many St George initiatives, Bendigo/Adelaide Bank was less rate competitive in one of its home states," a statement from MISC explained.

"However the bank’s broader mortgage manager business and private label activity in other states contributed to collective regional gains in Queensland and NSW," it said.

In Victoria, regionals managed to claim more share - or 36% - as a result of Bank of Melbourne's 'aggressive' variable rate promotion.