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Ninety per cent of brokers sent loans to the non-majors in October, with a falling proportion using the big four, according to the latest Broker Pulse survey.
The findings come in the latest Broker Pulse report from Momentum Intelligence, Momentum Media’s research arm.
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The survey seeks to understand the collective lending experiences of residential mortgage brokers each month in a bid to help them make more informed recommendations to clients.
The latest survey, which received 252 responses from Broker Pulse members between 1 and 12 November 2021, revealed that brokers are increasingly using non-major banks for their clients.
According to the data, 90 per cent of brokers sent a loan to at least one non-major bank in the month of October. This is a marked increase from the month prior, when only 79 per cent did, and marks the highest proportion recorded since May 2021.
Of the non-major banks, Macquarie Bank continues to be the most popular of the segment, with 39 per cent of broker respondents saying they had used the bank last month.
ING, St. George Bank and Bankwest were all also particularly popular – with 31 per cent of brokers saying they had used them in October.
In tandem with a greater proportion of brokers using non-majors, fewer brokers are turning to the major banks for their clients.
The Broker Pulse survey found that 73 per cent of broker respondents had used a big four bank in the month of October, continuing the downward trend that first started in July 2021 (when 80 per cent were using a major bank).
Interestingly, the fall comes despite the Commonwealth Bank of Australia (CBA) continuing to be the most frequently used lender (44 per cent of brokers sent a loan to the lender in October) and receiving the third largest average number of loans per broker (at an average of 2.1 loans per broker). Across all lenders, brokers sent an average of 8.8 loans over the month of October.
Three of the major banks managed to also improve their turnaround times in October, according to broker respondents, with only NAB seeing a marginal increase in wait time (from 6.5 days in September to 7.4 days in September).
Meanwhile, the proportion of brokers using non-bank lenders held firm at 59 per cent for the third month in a row.
Commenting on the findings, Michael Johnson, Momentum Intelligence’s head of strategy, stated: “We see shifts between lender segments quite regularly but what’s interesting about this is that major banks are generally performing quite well at the moment.
“In the past, we’ve seen these lenders at extremely long turnaround times and poor broker experiences – but now they are performing significantly better but seem to still have lost some traction compared to the non-major banks.
“Clearly it’s a competitive market at the moment and on the whole, non-majors are continuing to service a wide-range of borrowers and brokers.”
The Broker Pulse findings echo those of the latest Australian Finance Group (AFG) Index, which found that the majors had seen less traffic from brokers in Q1 FY22.
The AFG data found that big four banks and their associated brands fell by 2.0 per cent to 57.3 per cent of the market over the first quarter of the financial year.
The Westpac Group recorded the biggest loss, dropping from 22.7 per cent to 15.0 per cent of the market. However, the other major banks all recorded an increase in their share.
The market share of the non-major lenders increased from 40.7 per cent to 42.7 per cent for the quarter, driven by ING (whose market share increased by 2.82 per cent to 3.28 per cent) and Suncorp (up from 2.75 per cent to 3.18 per cent).
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