APRA has nothing to worry about, says non-major

by Julia Corderoy26 Oct 2015
A non-major lender says the competition in the owner-occupied market will “absolutely” continue to heat up, but credit standards will “absolutely not” be relaxed.

These comments from Mark Woolnough, head of third party distribution at ING Direct, came in response to APRA chairman Wayne Byres telling  the Senate Economics Legislation Committee in Canberra that the regulator will remain “very alert” to any sign of deteriorating credit standards as the growth in lending to investors had been offset by increased competition in the owner occupied market.

Speaking to Australian Broker, Woolnough said many lenders would be looking to grow this segment of their portfolio after the regulator crackdown on investment lending.  

“I think that in the current low interest rate environment there are opportunities for all the lenders to essentially increase their owner-occupied portfolio. There is a lot of activity you are seeing in the owner-occupied market in various forms, such as interest rate reductions, cash back offers and other various incentives. These are certainly good for the consumer but also for the broker in terms of the value proposition they offer customers. 

“Most lenders would have seen a reduction in overall volume at times this year, as a result of a correction in investment lending. Therefore, as lenders are still actively looking to grow their portfolios – especially at ING Direct – a key to their strategy of building the ‘main financial institution’ relationship with their customers and helping their customers get ahead, the mortgage and home loan customer will play a key role. My view is that we will continue to see an increase in activity, again in various forms across the market.”

But Woolnough says the banking regulator has nothing to worry about. 

“In terms of APRA, for ING Direct, our credit policy is extremely transparent. It is focused purely on the customer’s ability to repay the loan. Our policy and our approach to lending standards and guidelines are based on allowing the customer to achieve owning their own home. Our principals haven’t changed and won’t change throughout the cycle,” he told Australian Broker.

“The other thing we are extremely conscious of is the customer’s ability to repay at various times of a cycle. At the moment it is a very low interest rate environment but we have very strict measures in place in terms of our floor or assessment rate in order to ensure that when the market does turn – as it always does and eventually will – our customers aren’t experiencing any form of home loan duress of stress on their ability to make repayments.”


  • by Denise Brailey BFCSA (Inc) 26/10/2015 3:38:38 PM

    Lending standards have been "relaxed" for almost two decades and therein lie's the property bubble problem. Victims of these loans are getting very restless indeed. The bubble that APRA recently said "is no longer a problem" after living in denial for years: "there is no bubble problem." Look at the state court lists of defaulting mortgage loans.

  • by GC 27/10/2015 8:36:51 AM

    Denise, if people stopped continuing to get credit after the mortgage loan settles they wouldn't be in trouble. It's not the mortgage loan that creates the problem it's the multiple credit cards and personal loans people get that creates the problem.