Westpac third party channel shrinks by 6%

by Miklos Bolza09 May 2017
Fewer loans are being processed through the third party channel at Westpac with broker volumes dropping by 6% on a year-on-year basis.

The bank’s 2017 Interim Financial Results released yesterday show broker share decreasing with 43% of loans delivered via the third party channel in the first half of 2017. This was a drop of 1% from the second half of 2016 and a drop of 6% from the first half of 2016.

Other than this, the bank’s financial results paint a strong picture for the major bank with net profit for the first half of 2017 increasing by $206m or 6% to $3.9bn since the same time period last year.

Westpac’s share of the mortgage market remained steady at 24% in the 12 months prior to 31 March 2017, according to the latest figures from the Australian Prudential Regulation Authority (APRA).

As of 31 March this year, the bank held $413bn in housing loans. This was an increase of 6% from the $391bn held in March 2016 and an increase of 2% from the $404bn held in September 2016.

This half yearly rise was slower than the Australian system credit growth of 3% – which Westpac attributes to tighter lending requirements, new lending discounts and changing interest rates on interest-only, investor and foreigner mortgages.

The bank’s annual investment loan growth for property has thus been slowed to 6.4%, below APRA’s 10% speed limit.

Brian Hartzer, CEO of Westpac, said that although the bank remained positive about the Australian housing market, prices were expected to moderate this year.

The major’s mortgage portfolio remained sound with 90+ day mortgage delinquencies in Australia increasing one basis point to 0.67% during the half year period. This can be traced to market downturns in resource dependent areas of Western Australia and Queensland.  

“90+ day delinquencies remain low by historical measures and our home loan book continues to perform well with more than 70% of customers ahead on their repayments.”

Investment properties also have a low 90+ day delinquency profile of 0.47%, well below the portfolio average.

The number of properties in possession at Westpac has increased by 120 during the first half of 2017 putting the total number at 382. This is primarily as a result of regions impacted by the mining downturn.

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LMI provider sees 22.4% drop in net profit

One in two ANZ loans written by brokers

COMMENTS

  • by Ed Ridge 9/05/2017 8:57:52 AM

    And this will make them even more confident that reducing commissions will be right thing for them.

  • by DAW 13/05/2017 8:41:19 AM

    That % drop could have something to do with the fact that as brokers we have access to options. The options are better than what Westpac is offering, so we go elsewhere for our borrowers. That's why brokers are valuable.