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ANZ turnaround times lowest in 2 years

Performance

The major bank’s turnaround times returned to single digits for the first time since March 2020 at nine days in April 2022, new data has revealed.

According to the latest findings of the monthly Broker Pulse survey from Momentum Intelligence, ANZ’s turnaround times declined to the lowest level since April 2020 when they were at 10 days (before surging to 22 days in May 2020).

The Broker Pulse report – which compiled the responses of 231 brokers to the survey between 1 and 14 May about their experiences from applications submitted throughout April – showed that turnaround times reached single digits for the first time in two years at the major bank (it took seven days to reach an initial credit decision in March 2020 and six days in February 2020).

ANZ’s turnaround times hit a peak of almost 27 days in July 2020 (almost a month), according to the research.

The improvement in turnaround times has followed acknowledgement by ANZ during its release of its results for the first half of its financial year (1H2022) that it had “let down” brokers in relation to processing.

ANZ chief executive Shayne Elliott said the longer delays in the broker channel can largely be attributed to the fact that most broker-originated loans are new-to-bank customers, and as such, would require more verification/checks than existing customers.

He added that a larger proportion of self-employed borrowers have been coming through the broker channel, which he said “inherently takes longer for [the bank] to verify [their] income because it’s likely to be more volatile”.

According to ANZ, it is now taking a median of three days to reach an initial credit decision for “simple” applications and a median of seven days for more complex files.

While the major bank reported in its results that its loan book growth remained flat (as it continues to struggle to recover from its losses due to long processing delays over the past few years), it has started to see signs of recovery following investments in processing resources.

The Broker Pulse survey also revealed that ANZ was the second most commonly used lender, with 36 per cent of broker respondents stating that they used it (behind the Commonwealth Bank of Australia [CBA], which was used by 42 per cent of the broker respondents).

Turnaround times remained steady at CBA, hovering at around four days since February 2022.

Macquarie Bank was the third most commonly used lender at 35 per cent, but its time to initial credit decision rose slightly from two days in March 2022 to three days in April 2022.

National Australia Bank (NAB) reduced its turnaround times from five days in March this year to four days in April, the lowest turnaround times since September 2019 when they were at just over five days, according to the Broker Pulse data.

After slashing six business days off its turnaround times in February 2022 to seven days, Suncorp's turnaround times jumped to 12 days in April to reach an initial credit decision.

The lender recently reported above-system growth in its home loans in its quarterly update in May, which its CEO Clive van Horen attributed to faster broker turnaround times.

The smaller authorised deposit-taking institutions (ADI) – or those used by less than 20 per cent of Broker Pulse respondents – maintained average turnaround times of nine days, according to this month’s Broker Pulse figures.

NAB-owned 86 400 reduced its turnaround times by a day to four days in April 2022, while brokers reported that Great Southern Bank, Auswide Bank, and MyState took six days to reach an initial credit decision and Newcastle Permanent and Citibank took seven days.

Turnaround times at Heritage Bank and Teachers Mutual Bank were at 10 days, BOQ and Beyond Bank were at 12 days and 13 days respectively, while brokers reported the highest turnaround times at HSBC (20 days).

The primary reason for brokers to recommend a major bank or a non-bank to clients was “client circumstances”, while product pricing rated highly for non-major banks.

Over 60 per cent of brokers also reported recommending Macquarie Bank for its turnaround times.

Turnaround times increased in the non-bank lending segment from an average of five days in March 2022 to six days in April.

Brokers said Advantedge, AFG Home Loans, and Connective Home Loans were offering the fastest turnaround times at four days each.

To find out more about the Broker Pulse survey, visit the Broker Pulse survey website.

Original story on The Adviser.

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