Mortgages driving up ANZ profit

ANZ chief Shayne Elliott’s aggressive push to sign up owner-occupiers appears to be paying off, with the lender’s beefed-up loanbook helping drive its third quarter cash profit to $1.79 billion.

But a key analyst has warned that the property sector and those exposed to it are at risk of a price downturn fuelled by rising mortgage arrears rates, high household debt and low income growth.

Mr Elliott attributed ANZ’s 1.3 per cent growth in mortgage lending during the three months to June, compared with a year earlier, to attracting more owner-occupier customers. This helped to push it above the combined average growth of the home loan market, at 1 per cent.

“We’ve been growing our business in owner-occupied home loans much faster than the market and actually really reweighting our portfolio towards that and we’re really comfortable with that,” Mr Elliott said.

People who are buying a house to live in are the hottest ticket in town for Aussie lenders as the banking regulator cracks down on property investors amid price bubble fears.

The strategy helped drive ANZ’s cash profit for the three months to June up 5.3 per cent on the average first-half earnings, to $1.79 billion.

In March, ANZ broke ranks with the rest of the Big Four by discounting its owner-occupier loans while simultaneously hitting investors harder.