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The major has once again reported growth in the proportion of loans coming from the third-party channel.
Westpac Group (Westpac) has released its financial results for the financial year ending 30 September 2024 (FY24), revealing continued growth in the volume of business it receives from the broker channel.
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Almost two-thirds (63.6 per cent) of new Australian mortgages in 2H24 were written by brokers, according to the major bank’s results, equating to $35.1 billion of the $55.2 billion settled by the bank over the half.
As such, the proprietary channel’s share of new loan originations continued to dwindle, dropping down to 36.4 per cent.
Broker flows have risen sharply at the major banking group recently, having increased in the six months to September from 61.4 per cent in the first half.
Indeed, broker-lodged loans increased by 29 per cent over the year to September (having accounted for less than half – 49.2 per cent – of new mortgage business in 2H23).
The FY24 results revealed that more than half of the major bank’s Australian mortgage book comes from the third-party channel (51.8 per cent).
Overall, Australia’s second-largest mortgage lender saw its total mortgage book increase to $503.3 billion, according to Westpac Group’s FY24 results.
When removing the loss of loans from the group’s exit of RAMS, as well as paydowns and property sales, the major bank’s Australian mortgage book totalled $473 billion, up $23 billion on FY23.
However, the 2H24 flow of new mortgages settled ($55.2 billion) was lower than in the same period last year, when it settled $59.6 billion.
The major bank also revealed that owner-occupier loans made up 64.0 per cent of its total mortgage portfolio (down from 67.8 per cent in 2H23), while investment property loans made up 36.0 per cent (up from 31.1 per cent), broadly consistent with trends in the Australian Bureau of Statistics’ most recent Lending Indicators data release.
FY25 focus
Improving customer service was one of the banking group’s key themes for the year, with outgoing Westpac CEO Peter King saying the group had halved the time to home loan approval, driving an uplift in the segment’s net promoter score (NPS).
The major bank’s results presentation showed the average time for decision in FY24 was 5.2 days for the proprietary channel (down from 7.9 in FY22) and 5.7 days for the third-party channel (down from 11.5 in FY22).
During the investor call, King said investments in customer service, processes, and technology had underpinned growth in mortgages despite intense competition in the segment.
“We’re priced above peers in the last six months, while holding share, excluding the impact of the RAMS wind-down,” King said.
“For us, lifting services improved the customer proposition. Time and decision ended the year at less than five days, with almost 20 per cent of applications this year approved within two days.
“The performance in broker and first party channels is now similar with broker average time to decision at 4.7 days in the month of September.
“We also improved our settlement process, recognising it’s a key moment for our customers. We improved our on-day settlement by 4 percentage points. And that sees as consistently towards the top of PEXA’s ratings.”
The major bank also pointed to key areas of focus for FY25 including mortgage system consolidation and the roll-out of multiple offset account features for all Westpac customers and digital personal loan originations.
End of an era
This latest reporting period marks the last for long-serving King, who concludes his 30-year career at the bank when he retires on 16 December 2024.
King will be replaced by Anthony Miller, Westpac’s current CEO for the business and wealth division.
“After five years as CEO I’m pleased to hand the bank over in very good shape. Westpac is a simpler, stronger bank and we are better at managing risk. Our people are highly engaged with an organisational health index score ranking in the top quartile globally,” King said.
“Following a period of simplification of the bank, I know our people are excited about the next phase of growth and I thank them for their support.
“I’m confident Westpac is positioned well for the future as it embarks on a new era under the leadership of Anthony Miller.”
[Related: Westpac broker flows reach over 60% in 1H24]
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