Heritage backs APRA stand on ‘cowboy’ lenders
THE banking watchdog’s crackdown has knocked out some lending “cowboys”, according to Toowoomba-based Heritage Bank.
The comments came as Heritage, a 61-branch lender, recorded lower profits amid tough competition and higher spending.
Concerns have grown about a property bubble and, since last year, the Australian Prudential Regulation Authority has taken steps including a limit on investment loan growth and focusing on a borrower’s ability to service loans.
Customer-owned Heritage argued it had been a conservative to the extent brokers had said other banks would lend “materially more to the same customer”.
“I don’t think (the other lending is) prudent,” Heritage chief executive officer John Minz said. “What I’m saying is as a result of APRA’s interference, they’ve taken some of the cowboys out of the market.” The move had created a more level playing field, he said.
But conservatism is costly, at least short-term.
Profits at Heritage slipped 6 per cent to $33.6 million in the year. Mr Minz argued this was a strong result considering market competition and Heritage’s increased technological investment.
Heritage’s loan approvals lifted 28 per cent to $1.84 billion. Roy Morgan Research statistics also said Heritage’s customer satisfaction levels were 93.4 per cent, with rivals Suncorp at 90.9 per cent and CUA 92.1 per cent.