AFG Competition Index October 2012


Non major lenders have seized market share from the Big Four banks and their subsidiaries over the past year, with their market share rising from 19.6% in October 2011 to 24.3% last month – an increase of 4.7%. Expressed as a proportion of the approximately $300 billion annual mortgage market, this increase in market share equates to about $14.1 billion.

Borrowers who are turning to non major lenders in greatest numbers are those seeking to refinance their home loans. In October last year, only one in five borrowers refinancing (19.4%) used a non major lender. That figure increased to 28.7% last month – nearly a 50% increase over the year.

Non major lenders have also made inroads among investors, who are traditionally the ‘stickiest’ borrowers because they tend to leverage off properties against which they have already secured financing. Non major market share among investors rose from 16.6% in October 2011 to 22.9% last month – an increase of 38%.

Mark Hewitt, General Manager of Sales and Operations says: ‘A recent Government survey showed that about 45% of people are not confident that they have the best mortgage deal. This lack of confidence is translating into refinancing which in recent months has been working to the advantage of non major lenders. Suncorp remain the dominant non major, but we’ve also seen Macquarie Bank strengthen in recent months, and ME Bank has also made rapid inroads in a very short space of time.’

Last month Suncorp had 7.1% of the overall mortgage market, but was particularly strong among first home buyers, where its share was 10.1%.

Macquarie Bank’s market share is 2.3% overall, and 3.4% among investors. And ME Bank has seized a 1.0% market share in the past five months, particularly benefiting from refinancers, where its market share was 1.5%.

AFG Competition Index – October 2012