Co-op bank gallops ahead of the market

The Co-operative Bank is growing its home loan book at twice the market rate for two consecutive years.

Wednesday, May 29th 2024, 6:12AM

The Co-operative Bank has continued its above market lending growth, adding $218 million to its book in the 12 months ending March 31.

Over the period, its mortgage book grew 8% to just over $3 billion from $2.78 billion in the year prior. During this period the system growth, or the overall growth of the home lending market was 3.1%.

"It was the second year in a row we have grown our home loan value at more than twice the market, adding about $422 million to our balance sheet over the past two years, including $218 million of home loan growth in the past year. This has taken our total home loan portfolio to $3 billion," chief executive Mark Wilkshire says.

"We will continue to try and grow above market," he says.

Mortgage advisers account for around 50% of its originations and he is happy with that proportion.

"I'm quite comfortable with a 50:50 split," he says.

But he also says there are opportunities for growth in the adviser space.

He attributes the growth in the lending book to a number of factors including first home buyers (FHB) and "middle New Zealand".

Around 30% of the loans written, by customer numbers, not dollars, went to FHBs making The Co-operative Bank one of the bigger players in this market.

"It's an important market segment for us," Wilkshire says.

He also says the Kāinga Ora first home loan is important for the bank and he is pleased it has survived although the government, last week, canned the Kāinga Ora first home grant.

Other factors behind the growth of its home loan book were "really consistent pricing" below what the big banks's offerings and good customer service. He noted that being a member-owned New Zealand business was attractive to customers.

Nearly all Co-op's home loan customers were off low rates and now were on rates starting with either a six or a seven.

Wilkshire reckons it's a buyers' market at the moment and most loans are being written on a one-year term as there is an expectation interest rates will fall next year.

Tags: Co-operative Bank