While the official figures indicate that the big banks still dominate mortgage sales, data presented by broker Mortgage Choice at its results presentation on Friday suggest that smaller institutions may be making a comeback.
The broker reported that loans advanced by big four banks accounted for 75% of its settlements in the December quarter but came back to 71% in the March quarter and 60% in the June quarter.
“Other bank” share rose from 21-33% over the same period, while building societies and “other lenders” also gained share.
Mortgage Choice chief executive, Michael Russell, said some of the lenders doing more work with the group’s brokers were Suncorp, St George, BankWest and Newcastle Permanent Building Society. (St George and BankWest are owned by big banks but both claim to set their own pricing and product features.)
Russell said some lenders had reactivated more aggressive products. For example, BankWest has reintroduced its Rate Tracker home loan, which offers a discount to the average variable rate of the big four.
Mortgage Choice was beset by a slowdown in settlements and lower commissions in the 2008/09 financial year. It reported a 23.9% fall in cash earnings, down from $17.1 million to $13 million.
The group also reported that it had cut franchise numbers from 420 to 350 and broker numbers from 650 to 577.
Russell said recruitment of new franchisees was a priority in the current year. He also hopes to increase revenue by diversifying brokers’ product offerings into areas such as insurance.
Russell said he did not expect any more cuts to commissions this year, although a change flagged by St George will only take effect on October 1.
The average up-front commission came down from 70 to 60 basis points during the year and the average trail came down from 25 basis points to below 20.