Majors sustain improving turnarounds; small and non-ADIs take a dip

On its 2nd anniversary, Broker Pulse, which aims to help brokers make informed business decisions by facilitating peer-to-peer knowledge transfer, now deep-dives on lender performance amid varying loan complexities.

A total of 234 brokers participated in the latest Broker Pulse survey conducted between September 1 to 10, 2021. According to the most recent findings, loan processing speeds are once again creeping up for some non-major banks and most non-ADIs, after efforts to trim turnarounds showed early signs of improvement in June.

Broker Pulse’s head of broker success, Michael Johnson, describes overall lender performance as “moving in the right direction,” although he added that “many of the more complex scenarios are still taking much longer.”

Large ADIs

Despite a better average turnaround of 8 business days for all large ADIs, August was a turning point for some of the non-majors, as turnarounds reached record highs over the last 18 months.

Major banks remained consistent at keeping their turnarounds under control, with ANZ, CBA, and Westpac showing sustained month-on-month improvements and NAB clinching its fastest processing time of 6.0 business days since April 2020.

However, the trends are quite different for the non-majors.

Suncorp had been consistently gaining speed since February of 2021, with turnarounds sitting at 8.5 business days as of last July. In August, however, the large ADI marked a 50% increase in processing time, now sitting at 12.8 business days.

Previously the fastest ADI, ING now lags behind Macquarie at 2nd place after the former doubled its average processing time, now extending to 5.6 business days to initial credit decision.

Despite above-average processing speeds that currently sit at 4.7 business days, Macquarie is also yet to put a stop to its trend of increasing turnarounds, which began last May 2021.

AMP Bank, along with ING and Macquarie reportedly showed their most extended processing times relative to their personal records since April of last year.

After peaking at 11 business days last May, Adelaide appeared to be on the road to recovery, taking only 6 and 7 days to initial credit decision in June and July, respectively. This August, however, brokers reported Adelaide’s turnaround to be at 10.4 business days.

Nevertheless, non-majors ME and Bankwest reportedly showed constant improvement, with turnarounds currently sitting at 8.1 and 6.0 business days, respectively.

On the other side of the spectrum, St. George Banking Group continues to struggle with processing times. After turnarounds peaked at 21.5 days in December 2020, the non-major has since failed to trim turnarounds to a single-digit September 2020.

Large non-ADIs

After bouncing between 4 and 6 days from April 2020 up until July 2021, the non-ADI lenders are now taking an average of 7 business days in August.

Michael points out the interesting shift in turnaround trends, where “we are seeing a shift where the non-ADIs are creeping up in turnaround times while the larger ADIs are coming back down to more respectable levels.”

AFG Home Loans and Bluestone’s slide in processing speed did not prevent both lenders from clinching first place, as they closed the month with an average processing time of 5.0 business days.

Currently sitting at 5.4 business days, Advantedge was the next fastest non-ADI to reach an initial credit decision. It was also the only large non-ADI to improve its turnaround speed, although almost all of them still only take roughly 7 days and below.

Resimac, which had been having a hard time securing single-digit turnarounds since June 2021, currently takes an average of 10.9 business days to initial credit decision and ranked the slowest among all the large non-ADIs.

Small ADIs

Similar to the large non-ADIs, small ADIs processed loans longer in August.

Now taking an average of 9 business days to initial credit decision, the overall average processing time of these lenders was up by 2 business days.

Teacher’s Mutual Bank reversed its impressive speed improvements in July after doubling its turnarounds to 9.9 days this month.

86 400, which had been taking less than 3 days to decide on loans since April also showed doubled turnarounds in August, now sitting at 5.9 business days.

After taking as long as 15 days in April 2021, Citibank substantially trimmed its turnarounds, between May and July. In August, however, the processing time for the bank is once again soaring, now at 13.4 business days. This brings it close to BOQ’s 13.9 business days.

Although still processing loans fairly faster than most of the small ADI lenders, Auswide also took a day longer on average.

Meanwhile, amid survey findings that more than half of the small ADIs took much longer to process loan applications in August, Bank Australia is doing a great job at speeding up turnarounds after a peak of 13.0 in April 2021, as it now sits at 3.5 days

Beyond bank also showed huge improvements, from reportedly taking 12 business days in June to release initial decisions, to 8.8 in July, and now at 5.3 business days.

Both My State and HSBC are keeping their turnarounds to less than a week, save for a blip in HSBC’s turnaround last April 2021, when it took exactly 7 days.

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