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Australia’s banks continue to maintain the lion’s share of the mortgage market, with new research showing these lenders now account for more than 90 per cent of the market.
According to RFi’s latest Australian Mortgages Market Wrap, the market share of owner-occupied lending commitments held by banks has increased in terms of both number and value.
An increase of 1.4 per cent saw the banks’ market share in terms of number rise to 89.4 per cent, while their market share in terms of value rose 0.8 per cent to 92.5 per cent – the highest share since March 2009.
The total value of bank-held owner-occupied lending commitments was up three per cent to $13.1 billion in May, while there was a 5.7 per cent increase in the number of bank-held loans, from 41,786 in April to 44,179 in May.
Westpac managed to grow its individual market share 0.1 per cent to 26.9 per cent – ahead of its nearest rival CBA, which currently boasts a market share of 24.1 per cent.
The major’s strong mortgage growth helped it to achieve solid net profit in the three months to June 30.
According to the company’s third quarter financial results, Westpac Group's net profit after tax was $1.45 billion – a 1.5 per cent increase in operating income.
Speaking about the results, the Group’s chief executive Gail Kelly said the “sound outcome” was not only a result of strong mortgage growth, but the bank’s multi-brand strategy as well.
“The momentum experienced in the First Half 2011 continued in the third quarter 2011, with core earnings rising around 2 per cent from improved contributions across our retail and wealth operations. Stronger and deeper customer relationships generated by our multi-brand business model contributed to this sound core earnings growth trend,” Ms Kelly said.
Moving forward, Ms Kelly said she didn’t expect profits to be as high in the fourth quarter, as the true costs associated with opening the Bank of Melbourne would become evident.
“In the fourth quarter 2011 costs associated with head office and administration changes will be higher. In addition, expenses in the fourth quarter 2011 will be lifted by one-off costs associated with the Bank of Melbourne launch.”
Mortgages are loans that are used to buy homes and other real estate where the property itself serves as collateral for the loan.
Mortgages are loans that are used to buy homes and other real estates where the property itself serves as collateral for the loan.