ANZ Bank chief executive Shayne Elliott has indicated the Big Four bank will ease its criteria to make borrowing easier this year.
Elliott concedes the bank may have been too cautious in its home lending decisions, after new figures showed its mortgage book shrank in late 2018.
The big four lender will now look to expand more quickly in the housing investor market, which has been dragging on growth in the wider $1.6 trillion mortgage market, partly due to the tighter conditions imposed by banks.
Figures published by ANZ last week showed its mortgage portfolio contracted in the last three months of 2018 by $542 million, or 0.2%. This was weaker than the wider banking industry in both the owner-occupier and housing investor market.
During 2018, ANZ said its loan growth was just 1%, compared with industry-wide growth of 4.2%.
The bank explained the slow growth by pointing to tighter credit policies within the bank and its preference for owner-occupier and principal-and-interest loans, which tend to be paid off more quickly.
“While we are maintaining our focus on the owner-occupier segment, we acknowledge we may have been overly conservative in our implementation of some policy and process changes,” Elliott says. “We are also taking steps to prudently increase volumes in the investor space.”
The slowdown in home lending comes as some banks are also warning of the potential harm to competition from the government’s plan to overhaul how mortgage brokers are paid, as recommended by the Royal Commission into banking misconduct.
However, Labor says it will allow mortgage brokers to continue being paid by banks if it wins government, abandoning its previous “in principle” support for the royal commission’s call that consumers should pay brokers an upfront fee.
Shadow treasurer Chris Bowen on Friday says Labor’s position is that upfront commissions, which are paid by banks to brokers for arranging loans, should be allowed to continue but be capped at 1.1% of a loan’s value.