ANZ has resumed mortgage market growth in March after a six-month period of market share erosion, according to Macquarie’s analysis. The bank’s resurgence is concentrated in investor lending, with ANZ expanding at an annualised rate in excess of 10% and outpacing peers on that measure.
Macquarie’s Smartmove Mortgage Pricing Index highlights that ANZ is competing aggressively on investor interest-only products, which represent about 40% of its new investor lending book. The bank’s interest-only pricing sits roughly 15 to 30 basis points below major competitors in that segment, a differential Macquarie flags as a key driver of the recent flow.
Reports also indicate ANZ is offering a retention cashback to borrowers and is the only major bank doing so among its peers. On the funding side, ANZ has lifted term deposit pricing to around 15 basis points above peers, a move Macquarie attributes to potentially greater funding needs given softer household deposit growth.
Across the sector, term deposit spreads have widened by roughly 25 basis points over the past two months and are now nearer to long-run averages. Macquarie models modest margin upside from elevated term deposit pricing, forecasting margin benefits in FY26 of between 1 and 3 basis points for the major banks. The firm, however, expects those gains to reverse through FY27-28.
Within the major banks, Commonwealth Bank of Australia (CBA) and Westpac (WBC) posted the strongest volume growth, expanding at around system levels in mortgages and outpacing the system in business lending. National Australia Bank’s (NAB) mortgage growth has been partly affected by the closure of its Advantedge product. Macquarie also notes household deposit growth has decelerated across the sector over the last three months.
Despite ANZ’s recent momentum in investor lending and its tactical funding moves, Macquarie retains an underweight stance on the sector. The firm cites risks including the prospect of higher bad debts, downside risk to volumes, and lower card income as central considerations informing that view.
Key points
- ANZ returned to mortgage growth in March, led by investor lending expanding at more than 10% annualised.
- ANZ’s investor interest-only pricing is 15-30 basis points below major peers and it is reportedly offering a retention cashback - the only major bank doing so.
- Term deposit spreads across the sector have widened by ~25 basis points in two months; ANZ’s term deposit pricing is about 15 basis points above peers.
Risks and uncertainties
- Higher bad debts across banks - a factor Macquarie cites as part of its underweight sector view.
- Downside risk to volumes - mortgage and business lending volumes could weaken, per Macquarie.
- Lower card income - potential pressure on fee-based income streams is noted as a sector risk.