Major bank market share surges

by Julia Corderoy16 Mar 2016
Australia’s biggest home loan lender, Commonwealth Bank (CBA) has seen a further surge in mortgage settlements in 2016.

The latest AFG Competition Index shows that the majors have significantly outpaced the non-majors this year, with the major banks – including their subsidiaries – increasing their market share by almost 5% to 71.1% in January. The majors gained further ground in February increasing their market share even more to 71.8%.

Meanwhile, the non-majors lost market share, decreasing from 33.5% market share in December to 28.9% in January and 28.2% in February. 

According to AFG general manager of sales and operations, Mark Hewitt, Commonwealth Bank was the real standout. 

“The most marked increase has been the flow of business to Commonwealth Bank, which has increased its share of our flow from 17% to more than 23% in the last quarter. 

“Commonwealth Bank subsidiary Bankwest was the other lender to record an increase in flow for the same quarter with a jump from 5% to 7%, giving the Commonwealth Bank group an overall market share of close to 31%.”

Commonwealth Bank’s share of fixed rate lending for the quarter was the key driver, with a jump from 13.8% to 24%. 

The “Big Four” all reported big increases in their share of fixed rate lending, according to AFG’s data, apart from Westpac which initially gained share but then dropped back to finish the quarter levelled out at 9%.

Amongst the non-majors, ME Bank jumped from 1.4% to 2.5% and AMP increased their market share from 1.4% to 2.2%. However, most of the larger non-majors lost market share. Bank of Queensland (BOQ) fell from a peak of 7% during the quarter to 2.5%. Hewitt said this was due to difficulties processing the volume of loans it received. 

ING Direct fell from 3.3% to 1.5%, Suncorp dropped from 3.6% to 2.7% and Macquarie’s market share decreased from 3.7% to 3%.

“When an organisation with the size and balance sheet power of Commonwealth Bank responds to competition, it can be very difficult for their smaller competitors to match them,” Hewitt said. 

“The broker channel is a highly effective and efficient channel for lenders to distribute their products and a competitive consumer offer is quickly taken up by brokers on behalf of their customers.”


  • by SEQ Broker 16/03/2016 9:45:32 AM

    Sorry for being a cynic. Is it true that CBA does not look very hard at discretionary expenses?
    Ergo brokers are taking the less risky option which is why CBA has improved its numbers from us.

    Even when you eagle eye the transactions on statements, we as brokers do not know what is included in HEM, and it seems it changes by lender. So who wants to take the risk of using a smaller lender with a more appropriate loan for the borrowers needs when you may not be able to borrow the funds required because the assessor decided that the phone bill was a touch larger than expected and now not in the HEM. Strike credit file with inquiry, strike broker with image of incompetence then go to a bank that the regulators would not take to court in a million years over their interpretation of the NCCP and APRA legislation.

    What we are seeing is the big 4 now cashing in on the regulations because of their seeming immunity to regulation / regulators. Please - correct me if I am wrong.