RBNZ Dashboard Data Reveals Shifts in Home Loan Market Share Among Top Five Banks

Date Published: 7 January 2024

Key Facts

• The ‘big five’ banks dominate New Zealand’s home loan market with a 93% collective share.
• The market share has remained consistent for at least four years despite internal shifts among the big five.
• ANZ is maintaining its share, while ASB and Westpac are losing, and BNZ and Kiwibank are gaining.
• The size of a bank’s mortgage portfolio is crucial for covering basic regulatory and operational costs.
• ASB’s loss of 1000 mortgage clients, worth $500 million, is a minor event for them but significant for smaller banks like TSB or SBS Bank.
• Annual growth in home loan lending peaked in September 2021 at +$34 billion but fell significantly to +$10 billion in the year to September 2023.
• The smaller, Aussie-owned bank BNZ almost matched the gains of the largest, ANZ in September.

Article Summary

In New Zealand’s home loan market, the ‘big five’ banks hold a dominant share of 93%, a figure that has seen little change in the past four years or more. However, trends within this group have seen some banks maintaining or gaining market share while others are losing ground.

Of these banks, ANZ has managed to hold its own while ASB and Westpac have lost some portion of their market share. On the other hand, BNZ and Kiwibank have seen an increase in their share of the market. Size is a significant factor in the mortgage lending industry, not just because of small margins and the high regulatory and operational costs involved, but also because a large mortgage portfolio helps a bank withstand shifting market shares.

These shifts in the mortgage market, largely driven by the competitive nature of the mortgage broker channel, can impact the standing of smaller players. For example, while a loss of 1000 mortgage clients might be a minor blow for ASB, it could have substantial consequences for smaller banks like TSB or SBS Bank.

Overall, the home loan market has become more competitive as growth slows down. The market witnessed peak annual growth in home loan lending in September 2021, although this expansion has since dwindled significantly. ASB and Westpac, in particular, have been feeling the pressure. However, this high level of competition is likely to persist, preventing any new player from disrupting the status quo.

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