Brokers increase share of major bank's loan book

by Julia Corderoy04 Nov 2014
After gradually losing its share in the $1.3 trillion Australian mortgage market, Australia’s second largest bank has recorded a 6.8% increase in its total home loan portfolio for the year to September 2014.

Westpac’s total housing portfolio has risen to $351 billion, growing at 1.0x system growth in the second half of the year – up from 0.9x in the first half and 0.7x in second half of last year. 

Westpac chief executive Gail Kelly said these results, coupled with the strong market, indicate a positive outlook for the bank.

“Housing credit growth has increased over 2014 and we expect growth at similar levels to continue through 2015, driven by strong demand and continued low interest rates. An upswing in home building is also underway.”

Brokers increased their share of Westpac home loan settlements by 35% over the year, settling $31.9 billion in the 12 months to September 2014 – up from $23.6 billion settled in the year to September 2013. The proprietary channel settled $38.1 billion in the year, up 21% from $31.4 billion last year.

Brokers have also increased their share of Westpac’s total loan book, edging up 1.4% this year to 43.4%. The proprietary channel has decreased their share of the bank’s total loan book to 56.6%.

The results breakdown also reveals that the percentage of home loans to owner-occupiers fell slightly to 47.1% while loans to investors increased to 45.2%. First home buyers also fell, making up only 10.3% of the bank’s loan book. The average LVR at origination is 70% and the average loan size is $229,000. The percentage of consumers ahead on mortgage repayments has edged up 2% to 73%. The major bank also reported a 12% increase in statutory net profit, to $7,561 million.

Looking ahead, Kelly is remains very optimistic, saying the bank is well positioned for the upcoming financial year.

“Overall, we have a strong franchise that is well positioned for the year ahead. We believe we will continue to deliver strong outcomes for our customers and our shareholders in FY15. Less than three years out from our bicentennial year, the Westpac Group is in great shape,” she said.