ANZ reports 12 per cent fall in home loan application values as tax changes hit banks hard
Another major bank is reporting a sizeable drop-off in this activity as housing tax overhauls sweep through the economy.
ANZ has experienced a 12 per cent fall in home loan application values as housing tax changes sweep through the country’s lenders.
Overall, ANZ’s cash profits rose 1 per cent compared with the average for the third quarter of the financial year to $1.9 billion, with a statutory profit of $1.95 billion.
Posting quarterly results on Thursday, the big bank flagged its ongoing cost-cutting overhaul was on track.
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By continuing you agree to our Terms and Privacy Policy.But in line with Commonwealth Bank and Westpac’s disclosures earlier this week, ANZ said changes to negative gearing and capital gains taxes had hit its home lending operations.
IG analyst Tony Sycamore said there were early signs of mortgage holders finding it tough to keep up with rising interest rates, and the bank’s returns were “unspectacular”.
“ANZ delivered a steady but unspectacular third-quarter result,” he said.
“Cash profit growth was modest at 1 per cent, held back in part by a NZ class-action provision, while operating income was flat. Net interest margin edged higher and the bank returned home lending to system growth, with Australian retail home loans rising 2 per cent in the quarter.
“However, underlying demand looked softer. Excluding the boost from the government’s 5 per cent deposit scheme, mortgage application value declined 5 per cent quarter-on-quarter and dropped 12 per cent from the budget announcement through to the end of July.
“Early signs of housing stress also appeared, with Australian loans 90+ days past due rising to 86 bps.”
Home loan application values have fallen 12 per cent since the Albanese government announced the contentious tax changes in its May budget, excluding mortgages given under the federal government’s 5 per cent deposit scheme.
The value of mortgages on ANZ’s books rose 2 per cent to $355 billion on a quarter-to-quarter basis. During the same three-month widow, application values fell 5 per cent.
Customers have less cash with the bank, as savings and transaction account values dropped 1 per cent for the quarter.
ANZ chief executive Nuno Matos said the bank’s margins and business volumes grew while productivity lifted.
“As we release our third quarter update, we remain on track to meet our return on tangible equity and cost-to-income targets,” he told the ASX.
“In the quarter, we continued to improve productivity, margins and business volumes, including accelerating growth in business banking and returning home lending to system growth.
“Our work to reduce duplication and simplify the bank is on track and we remain committed to our full-year cost guidance of 5 per cent down year on year.”
Originally published as ANZ reports 12 per cent fall in home loan application values
