Non-major lender ING is backing nine months of unprecedented growth with a new focus on the direct channel and continued expansion in the broker network.
While mortgage growth with the bank lies at above 9% (compared to around 6.5% system growth), the direct channel now takes up 15% of all loan originations from 10% last year. This growth lies on the back of an increase in primary customers to more than 350,000.
At a media lunch in Sydney yesterday (12 October), ING CEO Uday Sareen
said the bank had always relied heavily on brokers for mortgage acquisition. Growth in the direct channel will have its limits, he told Australian Broker
“I don’t see that number crossing 20%.”
In the meantime, the bank was still expanding its broker channel with the absolute number of broker transactions on the way up, Sareen added.
“We want to do both: to do broker and to upgrade the direct channel.”
Although some banks may be shifting away from the broker channel, Sareen stressed that this was not the case for ING. In fact, he predicted even higher volume numbers for brokers in the future.
That ING’s total mortgage book has grown 9% year-on-year primarily through brokers reflected the bank’s focus on acquisition through the third party channel, he said.
A focus on family
In the mortgage space, the bank’s primary customers are owner-occupiers. While ING’s mortgage market share sits at just over 3%, its owner occupier market share is closer to 3.7% while the investor book is below 2%.
“Our strategy has always been focused on our primary customers: mums and dads and owner-occupiers. In that segment, we’re definitely growing faster than market.”
At present, ING has an 80-20 mix of owner-occupier versus investor mortgages. Lending caps set by the Australian Prudential Lending Authority (APRA) have seen a fall in the bank’s investor book which now takes up less than 30% of new business. In comparison, interest-only loans take up around 25% of the bank’s loan book.
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