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NAB has lifted its share of the mortgage market by more than 2% since the lowest point in its market share in 2010, according to the Australian Prudential Regulation Authority (APRA), but rival big bank Westpac says it’s ‘happy to grow under the system’.
Data compiled up to the end of December, 2012, shows NAB's market share of home loans was 16.4%. Banks that lost market share in home loans over the calendar year 2012, based on APRA data, include CBA, down 0.8 percentage points to 27.2%, and Westpac, down half a percentage point to 25.6%.
CBA declined to offer comment, but Wespac senior media relations manager, corporate affairs and sustainability, Danny John, says the bank is comfortable with its current standing in the mortgage market.
“Westpac Group has, across both of its major brands - Westpac retail banking and St George - grown its market share by about 2% [in the past four years]. We're really happy with the growth that we've achieved over that period.”
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John says that, over the year to September, 2012, the market grew by around 4.7% on annual basis.
“In this slower growth environment we've been happy to grow a little under system (i.e. slightly less than the market). That is what we've done as we really make sure that we tightly manage the disciplines around our margin.”
He says analysts need to remember that big banks provide other financial services, including personal lending, business lending and superannuation, not just mortgages and that the success of an individual institution can’t be gauged by this single measure.
“The market has changed a great deal over the past five years...So it has been important for us to concentrate on other areas in business to help underpin and grow our earnings. Having said that, we're not ignoring the home loan market as it remains an important part of our business and it provides us with opportunities to talk to our customers about their financial needs and forming deeper relationships with them.”
John says Wespac has chosen to focus more heavily on other areas, including small and medium-size enterprise (SME), rather than the flagging mortgage market.
“We are a major provider of superannuation, both in the retail and corporate sectors and are growing good market share in the latter. We're also growing very good market share in insurance, especially in the life sector. Financial planning, savings and advice are very important areas for our retail bank and we just began refurbishing our branch network with new look, open-plan branches that allow us to have more comprehensive and fruitful discussions with our customers about their whole-of-life needs, not just loans like mortgages.”
He says the fight for market share in lending continues in a market segment growing at an ‘unusually slow rate’.
“Monthly financial aggregates released by the RBA on Wednesday put growth in home lending at 0.3% in December 2012, with year-end growth of 4.5%. This is a third of the rate of growth six years ago.”
