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The time it takes for smaller banks to reach an initial credit decision on broker loans has continued to improve, according to new figures.
Analysis of the latest monthly Broker Pulse: Residential Lending survey from Agile Market Intelligence has found that average turnaround times at smaller authorised deposit-taking institutions (ADI) fell from eight days in May 2024 to 5.6 business days in June.
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This marked the fastest turnaround time for this lender segment since October 2022, when they were at 5.4 days.
The results were based on a survey of 275 brokers conducted between 1 and 16 July to understand brokers’ experiences with lenders when submitting loan applications in June. Small ADIs are typically used by less than 20 per cent of the broker respondents.
A total of eight out of the 13 small ADIs included in the survey contributed to the overall improvement in turnaround times in June.
The greatest improvement was seen at Bank of Sydney, where turnaround times sharpened up from 11 days in May to three days in June.
The number of business days taken to reach an initial credit decision also shortened at BCU, P&N Bank, MyState, BOQ, Heritage Bank, and HSBC (although HSBC still took 10 business days – or two weeks – to reach an initial decision), according to broker respondents.
While turnaround times improved by three days month on month at Newcastle Permanent, it still took 13 days to reach a decision, the longest among all small ADIs included in the survey.
Average turnaround times at the larger banks remained stable, according to the Broker Pulse: Residential Lending survey.
The bigger banks saw turnarounds improve to 3.8 days in June, with Macquarie Bank leading the segment at two days, followed by Bankwest, Suncorp, and National Australia Bank (NAB) at three days each.
Macquarie Bank was the most commonly used lender in June, with 46 per cent of brokers reporting that they submitted applications to the non-major bank. This represented the second-highest level of usage of the lender by brokers on record.
ANZ was the second most commonly used lender at 41 per cent, followed by the Commonwealth Bank of Australia (CBA) at 35 per cent.
Meanwhile, non-banks (including aggregator white label brands) saw their turnaround times decline by a day to 4.4 days in June, with Connective Home Loans taking the shortest time to reach a decision, at two days.
RedZed reduced its turnaround times by three days between May and June (to three days), equalling the time taken at Bluestone Mortgages and Pepper Money.
For the fifth consecutive month, La Trobe Financial ranked last among non-ADIs with the slowest turnaround times at nine days in June (although it improved slightly from 11 days in May 2024).
Consequently, the non-bank’s broker satisfaction rating dropped 10 percentage points last month to 59 per cent.
Only 54 per cent of brokers were satisfied with La Trobe Financial’s application process (down from 64 per cent in May), while satisfaction with its assessment process was down from 75 per cent to 62 per cent and settlement process plunged from 67 per cent to only 44 per cent.
Several brokers commented that loan assessment times were too long, while one broker said that it took days to receive responses from the BDM.
To participate in future Broker Pulse surveys and for more information, click here.
[Related: Client loyalty greater if lenders make positive impact: Brokers]
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