Why did ANZ's adviser originated loans fall in the past six months?

ANZ’s reliance on advisers to originate mortgages fell slightly to 59% of net new lending in the six months ended March 31 compared with 61% in the previous first half.

ANZ chief executive Antonia Watson wasn’t sure why flows from advisers were down in the six month period; "I don't know how to explain it to you frankly."

But she suggested competition from other lenders may be one of the reasons. Watson reiterated earlier comments that ANZ "really values the broker channel."

While many advisers say banks are prioritising their branch customers over ones coming through the adviser channel, Watson says that is not so at ANZ.

“We make no distinction between these channels,” Watson says.

Earlier this week ASB announced it was adding 80 additional home ownership specialists as it prepares for a surge in home loan applications to help manage the wave of refixes coming this year. ANZ is only adding “a small number of additional people.”

Watson says because ANZ has the size and scale it can reallocate staff to help deal with the high volume of refixes.

Currently 30% of ANZ's customers (it has 562,000 home loan accounts) are on rates below 6% and by the end of the year that number will rise to 85%

Watson noted that the lending market is highly competitive with 25% of home loans churning to new lenders each month.

While some headlines have stated ANZ increased its half year profit by 24% the cash profit increase was closer to 1%.

Watson said by the end of this year, about 80% of customers with a fixed rate higher than 6% will roll off onto lower rates.

“These borrowers could potentially see 100-basis points or more coming off their home loans when they refix. For someone with a $500,000 loan, this could mean monthly savings of around $260 in repayments,” she said, noting that in the last three months, customersrefixing at lower rates have kept their repayment amounts steady or increased them.

“Almost 40% of home loan customers are ahead on their repayments by six months or more and 45% have a savings buffer of $5,000 or more in place,” Watson said.

The disclosure statement for the ANZ NZ branch, which should cover the entire NZ activities of ANZ, showed the bank increased mortgage lending by a net $2.28 billion in the second half, accounting for 23.8% of net new bank lending, according to RBNZ data.

The difference largely comes from hedging which was a turn around of more than $200 million between reporting periods.