has reported a $22 billion increase in its home loan portfolio, with broker originated loans on the rise.
According to the major bank’s full-year results released yesterday, ANZ increased its home loan book to $231 billion in the year to September 2015, a 10.5% increase from the previous financial year.
Mortgage brokers accounted for 48% of loans settled through the major bank over year, increasing their flow from 47% in FY14. Home loan settled through the bank’s proprietary channels still account for the majority of loans processed, at 52%, however, unlike mortgage brokers, the flow through ANZ’s proprietary channel decreased from 53% over the year to September.
It was a similar story for NAB
, which released its full-year results earlier this week, indicating the growing popularity of mortgage brokers and suggesting broker market share is likely to continue rising. According to NAB's full-year results, lending volumes through the broker channel grew by 12% over the year to September, while lending volumes through its proprietary channel grew by just 7%.
Despite the regulator crackdown on investment lending, ANZ’s investment portfolio remained steady at 39% of its total home loan portfolio. The Australian home loan portfolio now makes up 40% of the total ANZ Group’s lending.
Whilst the Australian division continued its strength of cash profit improvement with profit before provisions up 7% over the financial year, the cash profit for the whole ANZ group increased by just 1%, to $7.2 billion. This is the major bank’s slowest growth since a drop in 2008 amidst the Global Finance Crisis.
According to outgoing chief executive officer Mike Smith, this was due to macro-economic headwinds on the international and institutional banking division.
“In International and Institutional Banking profit was down reflecting the challenging global environment. This included pronounced market volatility in the final weeks of FY15 which saw a disappointing trading outcome in Global Markets,” he said in a statement.
As such, the major bank announced it would be winding back its trade-finance business in Asia.
“We’ve taken some hard decisions around the trade business in particular, which is a really competitive business in Asia,” in-coming chief executive officer Shayne Elliott, who is currently chief financial officer, said on a media conference call, according to Bloomberg
“From time to time, it’s a great business, and when we have excess liquidity, we can participate. In the second half, the returns were a little too low and we’ve deployed our capital elsewhere.”
According to Smith, ANZ will focus on cash management opportunities to boost profit, such as “high returning” transaction banking.