Brokers grow total ADI loan approvals by 5%

by Miklos Bolza30 Aug 2017
The number of third party loans across all large authorised deposit-taking institutions (ADIs) is on the increase, according to the latest banking figures from the Australian Prudential Regulation Authority (APRA).

In the 12 months prior to 30 June 2017, $49.8bn worth of residential loans were brought in through the third party channel for ADIs with more than $1bn in residential loans. This was an increase of 5.1% from the $47.4bn brought into these larger lenders the year before.

These figures come from APRA’s report, Quarterly Authorised Deposit-taking Property Exposures, released yesterday (29 August) which also showed that brokers brought in $37.0bn worth of loans through the major banks (an increase of 2.9%) and $9.6bn through the non-major domestic banks (an increase of 18.1%).

Regarding the total national banking portfolio, the value of residential loans held by all 142 ADIs increased by $105.2bn (or 7.3%) to $1.54trn in the year recorded.

This included $1,006bn of owner occupier lending and $536bn of investment lending which experienced an annual increase of 8.1% and 5.8% respectively. Only 38.2% of these loans were interest-only.

The 32 ADIs with greater than $1bn in residential loans held 98.7% of all residential mortgages, equalling 5.8 million loans with a total value of $1.52trn.

These larger lenders approved just over 5,800 loans throughout the year, putting the average loan size at around $262,000. This was slightly higher than the $252,000 recorded at the end of June last year.

In the 2016/17 financial year, the 32 ADIs with greater than $1bn in residential lending approved $384bn in new loans – an increase of $12bn (or 3.2%) from the year before. Of these:
  • $249.9bn were owner occupied (a decrease of 0.5%)
  • $134.1bn were investment (an increase of 10.9%)
  • $54.7bn had LVRs between 80% and 90% (an increase of 5.1%)
  • $29.7bn had LVRs greater than 90% (a decrease of 10.4%)
  • $135.5bn were interest-only (a decrease of 2.5%)
Looking at the different types of ADIs, APRA’s June figures gave a good breakdown of the proportion of the loan book for major banks and local domestic banks as follows:
 
  Major banks Other domestic banks
Loan book Annual % change Loan book Annual % change
OO $792bn +7.8% $141.2bn +10.9%
Investor $450bn +6.4% $60.8bn +4.2%
I/O $502bn +4.4% $58.0bn +4.3%

For new loan approvals over the year, trends in the major and non-major domestic banks are below:
 
  Major banks Other domestic banks
Approvals Annual % change Approvals Annual % change
OO $47.5bn -1.5% $12.7bn +11.6%
Investor $28.3bn +0.5% $4.6bn +2.6%
I/O $23.9bn -19.1% $4.7bn -8.5%

Related stories:

Resi lending surges by $10bn in June

Broker loans almost reach $50bn mark

Housing finance extends its rebound