Macquarie outlines its mortgage growth strategy

Macquarie’s financial services chief has declared it can maintain a rapid growth pace in the $1.7 trillion mortgage market.

Macquarie has recorded an increase in its mortgage loan book

Macquarie’s financial services chief, Greg Ward, has declared it can maintain a rapid growth pace in the $1.7 trillion mortgage market, chipping away at the major’s market share by keeping approval times down and using technology.

His comments came as an annual operational briefing showed Macquarie growing much faster than its larger rivals by posting an 11 per cent jump in its Australian mortgage book to $48.6bn in the December quarter, from the prior three months. The size of the home loan portfolio has almost doubled in the past five years.

Mr Ward said there were “significant growth opportunities” across Macquarie’s banking and ­financial services operations including in mortgages, which had benefited from a spate of changes and new technology since 2013.

“The strategy has been working,” he said, highlighting increased use of data, analytics and a digital transformation program.

“We are seeing it paying off in the home loans space. We are growing at a manageable pace.”

Mr Ward has refocused the mortgage business on less risky loans and has stopped Macquarie providing white-labelled mort­gages to other lenders. He said the unit was more customer-focused and had also contained costs.

Macquarie’s personal banking boss, Ben Perham, said the bank was consistently faster than the industry average on loan approvals and turnaround times, often twice as quick as the average.

Mr Ward conceded there was margin pressure within the division, which in personal banking was being felt in deposits after three cuts to official interest rates last year. He was looking at a “range of mechanisms” to boost Macquarie’s deposit business.

The banking and financial services division had total deposits of $57.7bn at December 31, up 3 per cent on the prior quarter.

The unit’s technology spend was $407m in 2019, but Macquarie has faced criticism for not making the real-time New Payments Platform available to all customers.

Funds on the Macquarie platform were flat in the December quarter at $91.6bn. The business banking loan book posted 4 per cent growth to $8.9bn while Macquarie’s vehicle asset finance portfolio fell 3 per cent to $14.2bn.

In business banking, Macquarie has developed a functionality called Auction Pay that allows payments of property purchase deposits electronically rather than using a bank cheque.