National Australia Bank Ltd. (NAB), the country’s fastest-growing mortgage lender, wrote 25 percent more mortgages in its branches in October and November, the head of its retail bank said.
NAB has also seen growth above the industry average in mortgages arranged through brokers, Gavin Slater said at a media conference in Melbourne today. Mortgages through all channels within the retail bank grew 14 percent in October and November from a year earlier, he said.
The bank is gaining from increased demand for mortgages helped by the lowest lending rates in four years and rising house prices. Australian lenders are competing for a share of the fastest-growing loan segment and NAB Chief Executive Officer Cameron Clyne has offered the lowest benchmark home loan rate among Australia’s four biggest banks since June 2009.
“We are carrying through the good momentum from the end of last year,” Slater said, referring to the end of the bank’s financial year on Sept. 30. “We haven’t diluted our risk settings to gain market share.”
NAB’s retail banking unit, which accounts for nearly 70 percent of the total mortgages held by the bank, saw 36 percent of its volumes generated by branches and 50 percent by brokers in the past two months, he said. NAB’s business bank also writes mortgages.
The lender’s mortgage market share has risen to 15.3 percent as of Aug. 31, up 2.5 percentage points from four-years earlier, trailing Commonwealth Bank of Australia and Westpac Banking Corp. (WBC), data from the Australian Prudential Regulation Authority show.
The big four banks held 85 percent of the country’s A$1.2 trillion ($1.1 trillion) of outstanding mortgages in September, according to the banking regulator. The value of new mortgages climbed 5 percent in the year to Oct. 31, the highest since June 2012, data from the central bank show. Business lending grew 1.4 percent in the period, according to the data.
The proportion of mortgages that represented more than 80 percent of a home’s value -- the loan-to-value ratio -- rose to the highest since the second quarter of 2009, data from the banking regulator show. Mortgages in which borrowers pay only interest also increased to the highest in at least five years, according to the figures.
“We are not seeing any significant areas of distress to be worried,” said Slater, who took up the role in April.
NAB’s retail banking unit, which offers mortgages, personal loans and lends to small businesses, posted a 17.5 percent increase in cash earnings to A$1.2 billion in the year to Sept. 30, filings show.
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