Westpac Denies Its Mortgage Lending Slowed In August

Post by Sharat on October 2, 2009 · Under Australian Economy, Business News, Company News, banking, mortgages · Comment

Australian retail banking major Westpac Banking Corp, has denied that industry data released by the Australian Prudential Regulation Authority (APRA) showing a sharp reduction in home loans during the month of August is true.

Westpac whilst conceding it had lost ground to rivals NAB and ANZ dismissed the result and issued a contradictory statement of its own, suggesting that it had registered an increase in mortgage lending during the same time period.

New data released by APRA shows that for the first time in a long time, the Big Four, with the exception of CBA had given up market share in mortgage lending.

According to the figures from APRA, Westpac’s mortgage lending declined by 8.3 per cent during the month of August.

Peter Hanlon, Westpac’s group executive for retail and business banking suggested that the lenders own data shows that it increased its home loan portfolio by 1.9 per cent, well in excess of the 0.7 per cent growth achieved by the banking system as a whole.

Statistical errors are not uncommon when analysing raw APRA data, and are usually corrected in the following months.

Critically however, Hanlon conceded that rivals NAB and ANZ were gaining market share, despite the fact that they have done so from a lower base.

“It’s fairly clear now that ANZ and NAB are starting to come back; there’s a bit more competition in the market,” Mr. Hanlon said.

In July ANZ and NAB’s combined market share of new mortgages fell below that of Westpac subsidiary St George, shocking market analysts.

It is thought that ANZ scaled back mortgage lending under the misguided belief that the Australian property market lacked the resilience it showed during the economic slow down.

A spokesman for the bank confirmed this at the time, saying adjustments to the business “should see improved flows in the coming months”.

“This includes improved turnaround times for processing mortgage applications,” the spokesman said.

Lisa Gray, NAB’s personal banking chief said that July tended to be a traditionally slow month in mortgage lending, with investors tending to bring forward transactions into June due to end of financial year tax considerations.

A report by Deutsche Bank on the APRA August data suggests that NAB has gained some ground in mortgage lending.

On Thursday, Steven Shaw, NAB’s general manager for mortgages said it was too early to call it a comeback story.

“While we are pleased with the August results, we still have some way to go,” Mr Shaw said.

The APRA data, including the home-lending reversal by Westpac, also suggested that the non-banks were making a comeback.

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