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The broker channel is writing nearly two-thirds of the major bank’s new mortgage business in Australia, according to its latest results, a record high.
On Friday (8 November), Australia and New Zealand Banking Group Limited (ANZ) released its full financial results for the financial year ending September 2024 (FY24) – the first released since it acquired Suncorp Bank.
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According to the results, the group’s overall lending portfolio (including retail, commercial, and Suncorp Bank) rose to $468 billion of net loans and advances in FY24.
ANZ’s Australian home loan book (excluding Suncorp) totalled $324 billion across 944,000 mortgages by the end of FY24 – up 6.5 per cent from $304 billion in September 2023 – with an additional $65 billion in business lending.
Suncorp Bank’s home lending portfolio totalled $58 billion by September 2024, up from $54.8 billion in FY23, with its business lending coming in at $13 billion.
Brokers flows for ANZ (excluding Suncorp) increased to 65 per cent in FY24, the highest proportion of new home lending business that the bank has ever seen from the channel.
This makes ANZ the major bank with the greatest flow of broker business, followed by Westpac (which revealed last week that almost two-thirds [63.6 per cent] of new Australian mortgages in 2H24 were written by brokers) and then NAB (which revealed yesterday that flows had dropped to 61.1 per cent in the six months to September). The Commonwealth Bank of Australia trails behind at 35 per cent of new CBA flows (for the six months to June 2024) or 39 per cent when including Bankwest.
Overall, the broker channel is now responsible for having originated 59 per cent of ANZ’s Australian mortgage portfolio (when excluding Suncorp).
Similarly, its New Zealand broker share has been increasing, rising 1 percentage point to 61 per cent (with the channel having originated 52 per cent of the group’s home loan portfolio over the Tasman).
The bank said that it had been investing in the broker channel over the year, including by launching its new brokerology training program (that currently provides mortgage brokers with education on ANZ home loan products, policies, and processes and will soon extend into business insights and wellbeing), as well as a new broker segmentation model with tailored service offering that it said was “driving better broker experience”.
It also recently launched a broker lending platform for GoBiz, its unsecured business lending brand, and has been simplifying its policy suite, which it said had been improving customer, banker, and broker experience.
Speaking to investors about its channel mix, CEO Shayne Elliott said: “We go where our customers go. The market is choosing to go to brokers; 75 per cent of the [mortgage] market goes through brokers. Now we can sit here and say: ‘We don’t want to compete; we only want to compete in 25 per cent of the market’, but we’d have a really, really small bank, right?
“So we had to find a way to have a proposition that is profitable, irrespective of channel. Hence, [ANZ] Plus, I mean, that is what we are doing now. We don’t think that the answer is to go and build more branches. We don’t think that because our customers don’t want to use them.”
Bank to move all customers to ANZ Plus in coming years
The bank CEO Elliott said that a key strategy for the ANZ banking group moving forward is moving all customers to ANZ Plus, its new AI-enhanced retail banking platform.
The platform currently offers savings and transaction accounts and a direct-only refinance home loan (for PAYG owner-occupier customers refinancing no more than $2 million in ACT, NSW, Queensland, South Australia, Victoria, or Western Australia). It is expected that ANZ Plus will open up to the broker channel in future.
There are currently around 850,000 customers using ANZ Plus, with another 4.5 million customers moving over to the platform over the coming years, starting with around 2 million customers who only have savings and transaction accounts next year.
More complex customers – such as home loan customers – will be moved onto the platform in 2026.
From 2027 onwards, all new retail customers will be onboarded onto ANZ Plus, with the expectation that all customers, including Suncorp customers, will be on ANZ Plus by the end of 2028.
Small businesses will also be able to join ANZ Plus and “fulfil their needs in a rich and engaging way, using AI and advanced analytic tools to help them run their businesses better.”
Looking forward, the bank said it was focused on improving the financial wellbeing and sustainability of customers through “excellent services, tools and insights”.
In particular, it said it wants to help customers “save for, buy and own a liveable home”, “start or buy and sustainably grow their business”, and ”move capital goods around the region and sustainably grow their business”.
Both CEO Elliott and Maile Carnegie, the group executive for retail banking, told investors that the bank would continue to invest in broker offerings.
Carnegie said: “We’re basically rebuilding almost everything else as well, and that includes things like our broker portal and how we’re going to interface and be able to partner better with our brokers.”
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