Westpac, Macquarie seize home loan share from CBA

Commonwealth Bank was the first to stop its cashback offers to attract mortgages and that helped rival Westpac quadruple its signings, UBS data shows.

Westpac sold four times more mortgages than its peers in July. Picture: Gaye Gerard

Westpac took advantage of the pullback from its largest rival, Commonwealth Bank to sell four times more mortgages than its peers in July, according to an analysis of monthly data by UBS.

CBA was the first major bank to withdraw popular cashback offers on new mortgages which drive high volumes at the expense of margins.

NAB followed suit, while Westpac withdrew the cashbacks on its namesake-branded home loans but left them on for mortgages sold under its St George, BankSA, Bank of Melbourne and RAMS brands.

Total loans and advances at the biggest bank in the country shrunk 1.1 per cent over the month, leading to a 20 basis point loss in market share in the owner-occupied mortgage market.

Westpac, meanwhile, accounted for close to two thirds (62 per cent) of net housing flow in July. Most of the rest of the flow (23 per cent) went to ANZ, which still offers cashbacks to customers seeking to refinance their loans, albeit at reduced levels.

Westpac and Macquarie gained 10 basis points in market share of the owner-occupied market to have 20.6 per cent and 5.1 per cent, respectively.

ANZ’s share was flat at 13.1 per cent. The Melbourne-based lender has grown its book above system rates every month since September 2022, which, E&P Capital banking analyst Azib Khan said was “concerning from a margin perspective given an intensely competitive prime mortgage market”.

“ANZ may see further market share gains as it continues to offer refinancing cashbacks,” he said.

ANZ has been competing very aggressively over the past year as it pursues its $4.9 billion takeover of Suncorp Bank, which was blocked by the antitrust regulator last month.

The deal would hand ANZ Suncorp’s 2.4 per cent stake of the mortgage market, and more importantly, also its deposit market share of similar magnitude.

ANZ and Suncorp are appealing against the regulator’s decision to disallow the deal but if the block is not lifted, ANZ will have no other choice but to continue a much slower fight to grow its business organically.

Macquarie was also a standout in its deposit gathering in July, with its “market leading” offer of 5.55 per cent deposit rate gaining traction with savers, UBS noted. On an annualised basis, the bank is growing deposits at a projected rate of about 41 per cent.

Total lending volumes declined a fifth of a percentage point in July, while deposits were 0.5 per cent higher, as household saving volumes reversed the previous month‘s dip to grow at 1.4 per cent.