Macquarie dominates new mortgage growth

Big four execs unpack what’s playing into the lender becoming such a strong player, citing its broker proposition

Macquarie dominates new mortgage growth


By Madison Utley

Macquarie Bank has charted strong growth in new mortgage credit as compared to other ADIs, showing particular domination in attracting new investment lending, according to APRA’s monthly banking statistics.

The data from January 2020 revealed the investment loan balances at NAB and Westpac both decreased, with the values of both investment and owner occupied falling at ANZ. The totals across the three majors remained largely flat. 

While CBA added slightly over $1bn to its owner occupied loan book, it showed just a $165m jump in investment lending. 

Conversely, Macquarie led growth in investment lending at just under $650m, with $800m added to its owner occupied loan book as well. 

Macquarie's recent success was addressed at RFi’s 2020 Australian Mortgage Innovation Summit held in Sydney last week, where executives from NAB and Westpac discussed what the second tier lender is getting right. 

According to Byron Donovan, NAB head of commercial management, "[Macquarie] takes up a bit of our time, trying to understand what they're doing."

"From what we see, they've had a very strong focus on service and the broker proposition. They're very transparent with what their strategy is, they support that with a very strong digital offering. They price above the line, with a lot of discretionary pricing.

"They've been really clear around supporting brokers, having a really slick service experience. When it first rolled out, in terms of volume, they did have some challenges, but they were quite open and honest and faced into it and said, 'We understand we've had some challenges. Stick with us. In four or five weeks, we'll have it rectified.' And they did. So it's been a very strong broker play, with service being the predominant driver.

"The numbers speak for themselves." 

Westpac head of customer engagement for home ownership, Joel Larsen, said Donovan's sentiments were "very close" to his own observations. 

"Macquarie was really bold in backing the broker channel, probably when the broker channel needed it the most through the royal commission. That was really sensible," he said.

"The other thing I would say is they're really clear around who they can loan to, and who they're not going to loan to; which means, one, they're able to position that price point, but also put that service offering out to a consumer really early."

To Larsen, the difference is around both lenders' "obligation to do mortgage lending". 

"For Westpac, we're about 'Well, we have to service the whole market.' Anyone that we can meet our obligations to, we should lend to. Other players like Macquarie are able to go, 'We're going to hone in on this segment of customers. We're going to do it really well. We're going to ask for the right level of documentation from the customers we know we can service the quickest.' By doing so, they've now been able to direct the broker market for that segement of customers, who would have typically probably sent those deals to major banks."

Kate Wilson, RFi Group research director AU/NZ and moderator of the panel, said the group was "shocked" by its broker survey results for this year which showed how much broker sentiment towards Macquarie had jumped in just 12 months. 

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