Mortgage brokers are increasingly taking the lead in sourcing home loans for Westpac, as the major bank’s own direct-to-customer channel continues to shrink.
The lender revealed first quarter earnings Friday, showing that the portion of mortgages that Westpac originated through its proprietary channels dropped to 44.4%, down from 45.1% in the prior quarter, and down from 47.3% a year earlier. The results highlight how brokers are increasingly playing an important role in Westpac's mortgage business.
Westpac's total loan book grew to nearly $528 billion during the quarter, year-over-year. Owner-occupied lending dipped slightly, while investor and first-time homebuyer segments grew modestly over the 12-month period.
The results highlight how brokers are increasingly playing a larger role in facilitating Australia's lending market at Westpac, even after some of Australia's largest lenders — including Westpac — have publicly stated intentions to boost their own proprietary-lending channels.
In fact, the push toward proprietary channel lending has been gaining momentum across the sector in the last year.
Commonwealth Bank of Australia's (CBA) direct distribution channel accounted for 67% of the bank's home loans during the most recent quarter, down slightly from 68% the previous quarter. But the CBA — one of two initial lenders in Anthony Albanese's new Help To Buy scheme — blocked brokers from being able to write loans at the launch of the government program.
CBA's General Manager Third Party Banking Baber Zaka told Australian Broker "that might change in the future." The bank has also previously said broker-originated loans are roughly 20% to 30% less profitable than its own proprietary loans.
Over at ANZ, the lender said during its investor day in October that the bank plans to boost its mortgage sales force by increasing the number of in-branch lenders by 50%.
At National Australia Bank (NAB), third-party brokers still write the majority of home loans at the bank, just not as many as in previous years. In FY25, roughly 59% of all new business came through the third-party broker channel, down from 61.1% in the second half of FY24, and 64.9% in the first half of FY24.
Meanwhile, brokers continue to write the majority of new residential home loans in Australia. The most recent stats from the Mortgage & Finance Association of Australia (MFAA) show that broker-originated loans accounted for nearly 78% of the market.
