ANZ Regains Mortgage Growth via Aggressive Pricing

ANZ Recaptures Mortgage Market Share

According to analysis from Macquarie, Australia and New Zealand Banking Group (ANZ) returned to mortgage market growth in March after six months of losing market share. This recent expansion is primarily fueled by aggressive strategies in investor lending, growing at an annualized rate of over 10 percent, ahead of its peers.

Strategy and Market Positioning

ANZ's strategy centers on competitive pricing for investor interest-only loans, which are priced 15 to 30 basis points below major competitors. The bank is also reportedly the only major peer offering a retention cashback. On the funding side, ANZ has raised its term deposit rates by approximately 15 basis points above rivals, potentially to counter weaker household deposit growth across the sector.

Broader Sector Outlook

While ANZ shows targeted growth, competitors like CBA and WBC are expanding at or above system levels in mortgages and business lending. In contrast, NAB's growth is partially hindered by a product closure. Macquarie maintains an underweight view on the banking sector, citing potential risks from higher bad debts and reduced loan volumes.

Summary

ANZ's aggressive pricing has successfully spurred growth in the investor mortgage segment, but it faces a challenging market characterized by slowing deposit growth and a cautious sector outlook from analysts. The sustainability of this high-growth strategy will be a key factor for investors to monitor.

FAQ

Q: What is driving ANZ's mortgage growth?
A: The growth is primarily driven by aggressive pricing on investor interest-only loans, with rates set 15-30 basis points below major competitors, and the offering of a retention cashback.

Q: What is Macquarie's outlook on the Australian banking sector?
A: Macquarie holds an underweight view, citing risks of higher bad debts, potential downside to loan volumes, and lower income from card services.

Source: Investing.com