Major banks claw back market share

by Julia Corderoy08 Sep 2015
The major banks are now responsible for almost three quarters of all mortgage lending as they claw back their market share by taking advantage of consumer uncertainty. 

The major lender market share – which includes the subsidiaries of the four majors, such as Bankwest, St George, Bank of Melbourne and Bank SA – dropped to 69% over June, according to AFG’s Competition Index. However, the trend was quickly reversed over July and August, which saw the majors stretch their share of the mortgage market to just over 74% by the end of August. 

AFG’s general manager of sales and operations, Mark Hewitt, says the major banks have taken advantage of an increasingly complex lending landscape.

“With regulator enforced changes to investment and interest only lending, this is the most disruptive period we have seen in the market for some time.  Major lenders are capitalizing on this and using the size of their balance sheets to dominate their smaller competitors,” he said.

“Most of the investor changes were announced during July and are now starting to have an impact.”

ANZ had the largest single market share of new mortgages in August (19.2%), followed by CBA (18.6%) and Westpac (13%).  Among non-majors, the largest market share in August was held by AFG Home Loans (4.7%) followed by Bank of Queensland and Suncorp (both at 3.6%). 

Whilst Westpac held the third largest market share overall, the major bank actually suffered the largest drop out of the major banks and their subsidiaries – with its slice of the mortgage pie falling 0.9% over August. 

ING suffered the most dramatic change amongst the non-majors, with overall mortgage market share falling from 4.3% to 2%.  

The major banks were responsible for 72.5% of total investment lending in August. AFG processed more investment loans for ANZ than any other lender, with the major accounting for 21.5% of all investment loans.

CBA was the most popular lender for first home buyers, attracting 19.2% of the market share. The major banks in aggregate accounted for 73.2% of the total first home buyer market share processed by AFG.