Second-tier lenders and NAB big winners in 2011 mortgage wars

Second-tier lenders and NAB big winners in 2011 mortgage wars
Larry SchlesingerDecember 8, 2020

NAB has emerged as the big mortgage winner in 2011, with the bank growing its combined owner-occupier and investment mortgage book by an impressive 12% during the 2011 calendar year, according to official APRA figures.

The bank’s growth rate was also more than double the national housing credit growth rate of 5.4% for 2011 calculated by the RBA (the lowest since the central bank began compiling figures in 1977).

During the year in which NAB kicked off its “Break-up” campaign on Valentine’s Day – encouraging Commonwealth Bank, Westpac and ANZ borrowers to switch to NAB – it grew its mortgage book by $19 billion to $177 billion, comprising $126 billion in owner-occupier mortgages and $52 billion in investment loans.

Year-on-year figures for major and second-tier lenders (owner-occupier and investment loans)

 

Loan book December 2011

Loan book December 2010

Gain over the year

% change

Westpac

$285 billion

$268 billion

$17 billion

6.3%

CBA

$263 billion

$252 billion

$11 billion

4.3%

NAB

$177 billion

$158 billion

$19 billion

12%

ANZ

$163 billion

$153 billion

$10 billion

6.5%

Bankwest (owned by CBA)

$45 billion

$40 billion

$5 billion

12.5%

ING Direct

$37 billion

$36.5 billion

$0.5 billion

1.35%

Suncorp

$29 billion

$28 billion

$1 billion

3.5%

Bendigo and Adelaide

$22 billion

$19 billion

$3 billion

15.7%

Bank of Queensland

$21 billion

$17 billion

$4 billion

23.5%

HSBC

$7.3 billion

$6.8 billion

$0.5 billion

7.3%

Source: APRA figures

When including the performance of its subsidiary Bankwest (growth of 12.5%) the Commonwealth Bank managed growth of 9.4%. As a stand-alone brand, the Commonwealth Bank managed growth of 4.3% for the year.

ANZ and Westpac (including St George and Bank of Melbourne) managed similar mortgage growth of 6.5% and 6.3%.

Using the same APRA figures but over a longer period and looking only at owner-occupier mortgages, The Weekend Australian shows the big four have grown their mortgage books by a combined $175 billion since the GFC (November 2008- December 2011), with Westpac showing the greatest growth (helped by the addition of St George’s $38 billion book) from $75 billion to $166 billion.

Federal Treasurer Wayne Swan disagrees that the major banks are increasing their market share.

“A lot of what you read from time to time in this area doesn't match up with the facts. We have powerful vested interests out there that are pushing their line all the time,” Swan said in an interview on the ABC’s Insiders program yesterday.

“Certainly the big four have a large market share, but these competition reforms are driving the capacity of the smaller lenders to get in there and to provide some vigorous competition and to give consumers a choice so that if they're unhappy with one of the big banks they can walk down the road and get a better deal,” he says.

Among the second-tier lenders, Bank Queensland was the star performer, recording mortgage growth of 23.5% over 2011, followed by Bendigo and Adelaide Bank (15.7%).

NAB has maintained the lowest standard variable interest rate of the big four banks – currently at 7.22% compared with ANZ’s 7.3%, Commonwealth Bank’s 7.31% and Westpac’s 7.36%.

It also currently has the lowest standard variable mortgage in the market through its online brand Ubank – currently at 6.14%, though only for those borrowers who are refinancing.

 

 

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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