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Westpac Group has sourced an increasing share of business from brokers and reported a growth in LVR rates.
Westpac Group reported a $3.6 billion net profit for the six months to 31 March 2014, a 10 per cent increase on the year before.
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The group includes Westpac, St George, Bank of Melbourne, BankSA, RAMS and BT Financial Group.
According to the half-yearly results, mortgage system growth increased from 0.8 times to 0.9 times, while housing loans rose 5 per cent to $338 billion.
Westpac Group sourced 42.5 per cent of its mortgage business from brokers compared with 41.8 per cent the year before.
The average loan size grew from $219,000 to $223,000 and the average LVR increased from 70 to 72.
The share of customers with mortgage insurance fell from 24.4 per cent to 22.2 per cent.
The share of low-doc loans fell from 5.2 per cent to 4.2 per cent and the share of fixed-rate loans increased from 15 per cent to 16 per cent.
“Australian mortgage customers continue to display a cautious approach to debt levels, taking advantage of historically low mortgage rates to pay down debt,” Westpac Group said.
“Including mortgage offset account balances, 73 per cent of customers are ahead of scheduled payments, with 21 per cent of these being more than two years' ahead.”
Westpac Group said it expected “lending growth to trend higher” in the second half of the 2013/2014 financial year.
However, the group also said its business was “substantially dependent” on the Australian and New Zealand economies and a “significant decrease” in housing valuations could lead to more defaults and reduced confidence among potential borrowers.
