APRA’s latest quarterly banking statistics suggest borrowers are avoiding major banks due to lack of trust and are instead seeking out smaller lending organisations. The Australian Prudential Regulation Authority’s quarterly figures reveal that housing loan growth among non-major lenders is outpacing that of the big four banks. Growth in housing loan approvals among smaller lenders increased 4.1% year-on-year, compared to a 3.6% rise among major lenders.
According to CEO of the Customer Owned Banking Association (COBA) Michael Lawrence, the data reflects the diminished trust in major banks following the recent scrutiny from the financial services royal commission. “Given the damage to the reputation of the broader banking sector, customers are looking for banking institutions they can trust,” Lawrence says.
APRA’s statistics also show that total assets in the customer-owned banking sector have surpassed $113 billion and the sector’s total housing loans reached nearly $85 billion.