Australian banking major National Australia Bank (NAB) embarked on a strategy this year of discounting its standard variable rate, is now starting to reap the rewards of the move, as it acquires a larger share of the home loan market.

The number of home loans underwritten by Australia’s fourth largest lender in the last four months rose at its fastest pace in the last half decade. The bank adopted an ambitious plan in 2010 to keep its standard variable rate, now 7.24 per cent, significantly below the levels of its major rivals.

The lenders mortgage book is now estimated at $144.39 billion, and is now the third largest loan portfolio amongst the big four lenders, ahead of rival ANZ and is by far the fastest growing portfolio amongst the big four.

According to data from the Australian Prudential and Regulatory Authority (APRA), NAB managed to increase its market share of the mortgage lending market by six basis points at the expense of larger rivals Westpac and CBA.

The most recent data available is from the month of May, which shows that CBA, Australia’s largest mortgage lender lost four basis points of market share, whilst Westpac’s share fell by 2 basis points.

Over the last quarter, NAB’s mortgage book grew by 14 basis points, whilst CBA’s fell by nine basis points.

NAB also managed to outpace its two larger competitors in the total number of home loans written in May and during the preceding quarter.

NAB’s volume of mortgages rose by 1.3 per cent in May and 3.5 per cent over the quarter.

Lisa Gray, NAB’s group executive responsible for personal banking attributed the robust growth figures to the lender offering the lowest standard variable rate in the market over the last year.

“We started 12 months ago to ensure that our customers received a fair exchange of value,” “For the last four months we outgrew financial system in home lending. It’s the first time we’ve had four consecutive months of growth above system since the middle of 2005.” Ms Gray told The Australian.

NAB attracted headlines in December last year when it was the only major to pass on just the RBA’s official increase of 25 basis points whilst its rivals all increased their rates by between 35 to 45 basis points.

Ms Gray hailed her bank’s low-rate strategy: “We’re seeing more home loan customers join NAB than we’ve seen in years. Our focus on providing a better deal has not only resulted in customer retention and growth; we’re also attracting a higher quality customer portfolio.”

Compare Australian Home Loan Deals

Related posts

  • NAB Embarks On Aggressive Mortgage Lending Strategy (0)
  • CBA & NAB Both Raise Interest Rates (0)
  • Australia’s Big Four Banks Raise Interest Rates (0)
  • Westpac Denies Its Mortgage Lending Slowed In August (0)
  • Westpac And NAB Lift Rates In Line With RBA (0)