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NAB has given more of its mortgage business to brokers after claiming they secure better clients than lenders.
General manager Steve Kane told the Australian Mortgage Conference in February that third-party clients were wealthier than direct-to-bank clients and also took out bigger loans.
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According to the bank’s half-yearly results, brokers increased their share of NAB’s mortgage balances from 26.9 per cent at 31 March 2013 to 29 per cent at 31 March 2014.
Brokers also decreased their share of mortgage drawdowns from 37.9 per cent to 34.3 per cent.
The bank’s share of the mortgage market grew from 15.2 per cent to 15.4 per cent, although system growth fell from a multiple of 1.7 to 1.3.
NAB’s housing lending rose 5.8 per cent to $241.1 billion. Owner-occupiers represented 72.1 per cent of this lending – and 8 per cent of those were first home buyers.
The average mortgage increased from $266,000 to $267,000, while the share of borrowers who were more than 90 days in arrears declined, from 0.52 per cent to 0.47 per cent.
NAB said low interest rates, supply shortages and foreign demand should continue to support the housing market, with rising unemployment likely to restrain price increases.
“While there is much discussion about bubbles, we do not believe that to be the case given continued subdued credit demand, soft income growth and a falling housing debt-to-asset ratio," the bank said.
“While Australia’s household debt service burden remains at very high levels, it has improved – largely due to low interest rates.
“Over 80 per cent of Australian mortgages are variable, making the most common mortgage rate very sensitive to monetary policy.”
NAB reported a half-yearly statutory net profit of $2.9 billion, up 15.8 per cent on the year before.
