Broker Small ADI turnarounds fastest on record

Turnaround times were the fastest on record at small ADIs last month, with one lender reportedly cutting its time to a decision by 10 days, according to new data.

The latest monthly Broker Pulse survey from Momentum Intelligence revealed that the number of business days taken to reach an initial credit decision by small authorised deposit-taking institutions (ADI) (those used by less than 20 per cent of broker respondents) fell to five days in October 2022.

This was down from eight days in September, the Broker Pulse survey showed.

The survey of 234 brokers — conducted between 1–15 November — also revealed that brokers reported the largest improvement at HSBC, where turnaround times fell from 14 days in September to four days in October to be ranked third among small ADIs.

Turnaround times also shrank at ubank (formerly 86 400) from five days in September to two days and at MyState Bank from five days to two days in October.

While the time taken to initial credit decision improved at six other small ADIs, it increased at Newcastle Permanent from seven days to nine days, at P&N Bank from nine days to 12 days, and remained stable at Great Southern Bank at four days.

At the large ADIs (used by more than 20 per cent of broker respondents), turnaround times remained at five days for the fourth consecutive month in October.

Brokers reported that Macquarie Bank had the fastest turnaround times at two days (down from three days in September), followed by ING at three days (down from four days in September).

While turnaround times remained at eight days at Westpac and six days at ANZ last month, they improved at the Commonwealth Bank of Australia (CBA) by two days to three days in October.

However, National Australia Bank’s (NAB) turnaround times increased by a day to five days in October.

Turnaround times improved by a day month-on-month in the non-bank and specialist lender segments at six days, the Broker Pulse data found.

According to brokers, Resimac posted the largest improvement in turnaround times, which contracted from nine days in September to four days last month.

Firstmac had the speediest turnaround times at three days (down from four days in September), while they reduced at four other non-banks in October, remained steady at Bluestone Mortgages, and increased at three lenders in this segment.

Notably, according to broker respondents, La Trobe Financial lagged behind its counterparts, taking 15 business days (three weeks) to reach an initial credit decision in October, up from 12 in September.

Non-major banks continued to attract the highest proportion of brokers for their turnaround times, with 51 per cent citing this as a reason for using them.

On the other hand, the proportion of brokers using a major bank for this reason dipped month-on-month from 35 per cent to 26 per cent in October.

Similarly, only 27 per cent of brokers surveyed said turnaround times were the primary reason for using a non-bank, down from 39 per cent in September.

Momentum Intelligence director, Michael Johnson, advised brokers to monitor turnaround times as the end of the year approaches.

“There’s a few factors that are bringing turnaround times down for most lenders including improved processes and some minor changes to volumes,” he said.

“It’s important for brokers to keep an eye on how these move as we head toward the holiday period as this is often when we start seeing some backlogs occur.”

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