Mortgage advisers write a third of ANZ's loans

In its results for the six months to March 31, adviser originated loans accounted for 34% of the bank’s book; up from 32% in the corresponding period last year.

ANZ chief executive David Hisco says the mortgage broker space has been “pretty consistent”.

“We think we serve them pretty well.”

He said mortgage broking “is a very professional business these days".

However, the “regulators are asking more and more questions and the brokers have to keep up their game or they will become irrelevant".

ANZ on Tuesday reported a 24% increase in profit in the first half of the financial year, to $928 million.

Hisco says the result “looks pretty solid and a bit flattering at the top line".

He says part of this is because of an earlier accounting change when some expense charges were accelerated.

Overall, underlying revenue was up three percent and expenses were down three percent.

“That’s what we would call a solid result and a good continuation of our strategy.

“I don’t really aim to run a bank which has underlying volatile performance. We are trying to create an almost boring, consistent and predictable bank.”

ANZ has retained our number one market share in mortgages, although it has dropped 38 basis points to 31%, but that “has been balanced with our commitment to lending responsibly".

Hisco explains that by saying the bank was making public comments last year about encouraging borrowers to pay off their loans while interest rates were low.

“It’s a little bit unusual for bankers to say pay off your loan,” he says.

Also, ANZ tweaked its lending criteria a little to help position itself to withstand interest rate rises when they come.

Hisco says the housing market was doing what “we hoped it would do".

“It is easing off slowing, supply in Auckland has increased and investors have stood down, given the large deposits required, and prices have eased off  and more first home buyers are getting a chance to get into the market.”

Speculation has gone out of the market, and people who want to buy and live in a home are getting a chance, he says.
However, the market is still under pressure, especially from high immigration levels.

Key facts

Average loan size at origination: $295,000 (unchanged)
Average loan size $145,000 (up 5.1%)
Owner-occupied loans 73% (unchanged)
Investor loans 27% (unchanged)