In early May, Macquarie Group released its financial year 2024 (ended 31 March 2024), cementing its place as a major player in the home loan space.
According to the FY24 results, Macquarie Bank’s mortgage portfolio grew by 10 per cent over the year to March, taking it to $119.3 billion. The growth was driven by strong demand in lower loan-to-value ratio (LVR) and owner-occupier lending tiers.
When extrapolating that across the $2.17 trillion mortgages on the books of Australian banks – that means that Macquarie Bank now holds 5.3 per cent of the entire Australian mortgage market – a huge achievement considering that its book was nearly half that size three years ago (when it was $67 billion).
A key part of its recent success over the last few years has been its well-documented ability to shift to writing loans quickly over the COVID-19 pandemic, when many majors struggled to take their systems online and floundered with keeping up with the groundswell of mortgage demand.
Even now, its technology has helped it achieve market-leading turnaround times, which are typically under a day, and broker partners are consistently praising the bank for its reliable and speedy process.
For mortgages, certainly, the bank is light-years ahead of other non-major banks (with BOQ and Bendigo and Adelaide Bank trailing behind at around $59 billion apiece).
But it’s still a long way off competing with the four ‘pillars’ of the Australian banking industry; the Commonwealth Bank of Australia (CBA); National Australia Bank (NAB); the Westpac Banking Corporation (Westpac); and Australia and New Zealand Banking Group Limited (ANZ).
For example, CBA’s monster mortgage portfolio was just over half a trillion dollars at the end of March (according to APRA data), with Westpac coming in close behind at $443 billion, NAB running third place at $318 billion, and even ANZ’s book of $274 billion is more than double that of Macquarie’s.
While Macquarie has been describing itself as a major bank for a few years now (and its market capitalisation certainly suggests it is), the main issue it faces in being called that by the general public is its lack of bank branches.
For many, a major bank is one that is part of the community and holds a place in the psyche of the public.
For the big four banks, that largely has been achieved by their longstanding history and by having a brick-and-mortar presence. After all, tradition has dictated that all the big players of pretty much any sector have a physical presence, where Australians can go and talk to someone face to face in a physical location.
Australian consumers have, in the past, wanted to be able to go and deposit their money at their bank of choice in person. And, in times of crisis, they want to be able to go and talk to a banker face to face to understand their options. We saw that clearly during the 2022 floods of Lismore, for example, when many impacted borrowers sought the help of those in pop-up branches in the town.
But as more people accept online-only players (think Amazon or Kogan for shopping, for example) and bank branches are being shuttered in large numbers as online offerings improve, perhaps Australians may now be ready to accept Macquarie as a major bank player.
The fact that its total customer deposits increased by $13.8 billion over the year, its home loan book rose by 10 per cent, and its business banking loan portfolio grew by 22 per cent in the year (to $15.8 billion), certainly makes it a force to be reckoned with.
What are your thoughts?
Should we be calling Macquarie Bank a major bank or making it the ‘big five banks’? Let us know by emailing in to [email protected]
