Westpac New Zealand lost 10 basis points of housing lending market share during its September financial year in a market its CEO Catherine McGrath says is intensely competitive.
Westpac NZ on Monday posted a 14% drop in annual profit with its net interest margin down nine basis points.
Over the year to September Westpac NZ says its housing market share dropped to 18.30% from 18.40%.
McGrath told interest.co.nz banks are competing strongly for customers' business, with Westpac NZ's growth at 0.9 times system growth.
"And New Zealanders are doing a really great job at emphasising that [competition] too," McGrath says.
She notes that during August a quarter of all home loans written across the market involved borrowers switching between different lenders.
"So it reinforces that moving your home loan is relatively straightforward and easy. And, you know, one in four people in that month, which is representative of quite a few months, are making the choice to do that," says McGrath.
In August Kiwibank CEO Steve Jurkovich told interest.co.nz ANZ NZ, the country's biggest home lender, had been especially aggressive in the home loan market, offering cashbacks of up to 1.5%.
McGrath also acknowledges ANZ NZ's aggression.
"Yep, we keep a close eye on everything that the competition are doing. We have noticed [the] strength of cashbacks. Our view is, and where we try and compete hard, is particularly on interest rates because we think that's one of the things that impacts your cash flow months in and months out," says McGrath.
It's fair to say sometimes Westpac NZ will match other banks' cashbacks and sometimes it won't, she says.
Westpac NZ says about half the first home buyer purchases it handled in the September year were made with less than 20% equity, which is in line with Reserve Bank figures for the overall market. And of those purchases, about half were through Kainga Ora’s First Home Loan scheme.
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