NEWS

ANZ and Westpac say more than half their home loans came from advisers in the first half of the financial year. Meanwhile, BNZ has seen no growth in adviser-originated loans during this period.

At ANZ advisers have been steadily increasing their share of loans accounting for 39% of loans in the first half of 2020 to 55% two years later.

Meanwhile, Westpac has reported 57% of its loans came from advisers. In the previous six months it said the number was more than 50%, prior to

Resimac takes on the banks

Non-bank. Lender Resimac has started a campaign designed to raise awareness that the company is a specialist property lender.

Resimac general manager New Zealand, Luke Jackson, says raising awareness will also help advisers when they put a Resimac solution in front of a customer.

“The new campaign will benefit brokers and advisers dramatically by making Resimac more recognisable to everyday consumers," he says. "Our goal is to make it known that we are residential property lending specialists whose sole purpose is to ultimately help people purchase properties. By treating customers as individuals and building mortgages around their needs, we are a very different breed to the traditional financial institutions.”

“We appreciate that it can be challenging for brokers and advisers to educate their customers about lenders other than the banks, with alternate lenders only representing a fraction of the market and lacking the brand recognition of the majors.

“This campaign will help change that by creating greater brand awareness and educating customers on Resimac’s value proposition. As residential property lending specialists, we’re not distracted by other products and services like insurance, credit cards and savings accounts offered by many financial institutions," Jackson says.

Prospa expands loan products

Business lender Prospa has launched a line of credit facility in New Zealand to existing customers and was looking to bring it to the adviser market soon.

Prospa NZ managing director Adrienne Begbie said the line of credit product gave business owners confidence that they would have money available when needed, without having to pay interest on it until that need arose.

It would also save time in making loan applications each time they needed cash.

Begbie would not say how high the line of credit would go, but said in Australia, the number is A$150,000.

Prospa has recorded a highly profitable three months and said in its third quarter earnings reports that the gross value of loans in New Zealand surpassed $100 million in the quarter.

Originations had risen 64% from A$19.9 million to A$32.7 million in the past 12 months.

In reporting its results, Prospa told the Australian exchange that it had a record third quarter with loan originations of A$172.1 million. This was up from A$120.8 a year earlier. ✚

Big bank broker business booms

Mortgage advisers have cracked a major milestone and originated more than half of home loans at two of the big banks in the six months to March 31.

Image: Antonia Watson

that mortgages arranged by advisers represented about 40% of its total loan book.

Westpac says the growth was "driven largely by our branch network being less available for customer visits as a result of Covid-19 lockdowns."

Meanwhile, in the same period BNZ’s origination through advisers remained unchanged from six months earlier at 34.6%

ANZ chief executive Antonia Watson said advisers were an important source of business for the bank. Like Westpac she said branch closures due to Covid were part of the reason advisers share of business had grown.

However, she also acknowledged lending was getting harder due to things like CCCFA, LVR restrictions and a changing housing market so borrowers needed to seek advice.

While advisers account for more of ANZ's business, its actual volume of new loan accounts fell significantly from 42,000 in the previous six months to 31,000 in this current half year period.

On the flip side average loan size ballooned out from $358,000 to $453,000 in the same period.

MBIE defends speed of CCCFA changes

BY ERIC FRYKBERG

Frustration is continuing to boil over the Credit Contracts and Consumer Finance Act (CCCFA).

The Government has proposed some limited reforms and is working on others. The initial reforms should be in place by June – but advisers, bankers and others are stuck with the law in the meantime.

Many believe the proposed reforms are inadequate and think the Ministry of Business Innovation and Employment (MBIE) is making glacial progress, even on the limited gains.

Financial Advice chief executive

Katrina Shanks says MBIE recommended only two changes to the regulations and some small changes to the code.

“So I would be surprised if it took two months to process them.”

On April 4 this year, MBIE proposed two initial reforms.

One was to stop counting savings or investments as living costs. The other was to stop adding daily expenditure such as cups of latte to the quantum of living costs, as long as robust financial data was already available elsewhere.

These proposals were then subject to public consultation, with a final version due in June.

Shanks says such a limited reform should not take that long.

“We are not talking about any complex change here. We’re talking about two simple changes in the regulations.

“I believe it can be done quite quickly.”

According to the Financial Services Federation (FSF), whose 85 members incurred an average cost of at least $2 million dollars each to administer a law they knew would be a mess, the limited reforms are insufficient.

“It was a bitter pill to have to swallow to have the deficiencies in the new regime become so glaringly obvious so early in the piece,” FSF “The change to the rules on borrowers' expenses goes no way towards addressing the overly prescriptive nature of these requirements… so the proposed change to the regulation is extremely disappointing.”

The New Zealand Bankers Association is similarly critical of the reforms.

Chief executive Roger Beaumont describes the Government’s reforms of the CCCFA lending rules as “just a band aid.”

“We don’t think the tweaks will make a big difference for most borrowers.

“That’s because most of the existing requirements remain in place, meaning customers will still have to provide detailed information about their spending, resulting in a more painstaking process and more loan applications being declined than before the December rule change.”

Meanwhile MBIE is defending itself against suggestions that its reform process is too slow, saying it is simply following proper procedure.

MBIE recently consulted on an exposure draft of the changes and is now analysing submissions,” the Ministry wrote.

“This feedback is important, as it will improve the workability of the initial changes and reduce the risk of any further unintended consequences.

“There is also a legal requirement to publicly consult on any changes to the Responsible Lending Code.” ✚

Avanti Finance is a Kiwi business so we understand Kiwi needs. As a non-bank, we offer a comprehensive range of lending solutions, including: long term and bridging first mortgages, caveat, vehicle and personal loans plus business loans.*