Shayne Elliott, CEO of the Australia and New Zealand Banking Group (
ANZ), has faced the House Economics Committee as part of an ongoing inquiry into the four major banks.
In his opening statement in Canberra yesterday (7 March), Elliott said the bank had looked hard at tracker mortgages and their place in the market.
“Our research showed only 10% of variable rate customers would think about switching to a tracker,” he told the committee. “In part, this reflects price. We cannot fund the bank with tracker deposits and this risk needs to be priced for.”
Launching tracker mortgages would therefore be “commercially unattractive” and make ANZ more complex, he said. However, he admitted that the bank would continue to assess demand.
Nationals member Kevin Hogan asked about ANZ’s relationship to mortgage brokers. While ANZ does not own any brokers [via aggregators or brokerages], Elliott admitted that – with a market share of over 50% – brokers were “satisfying some fundamental need” in the market.
He said that ANZ assessed all each broker loan application on its own to manage risk.
When pressed about broker commissions, Elliott said that while brokers were paid through a commission-based structure, there were no accelerators or volume-based incentives used.
Responding to another question from Greens member Adam Bandt on the risks of climate change, Elliott said that ANZ had done a lot of assessment around the impacts of global warming and was in the middle of doing this for housing.
Rising water levels were where the bank had a “greatest risk” and ANZ took these factors into account when offering customers a home loan.
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Broker incentives may “create distortions”: NAB CEO
