ANZ reduces mortgage broker commissions
(17 December 2004 – Australia) The mortgage broking industry’s annus horribilis continues with ANZ the latest bank to announce changes to the amount of commission it will pay brokers.
The changes comprise a five basis points reduction in trailing commissions, which are currently between 20 and 30 basis points; and tiered refunds of broker commission to ANZ if loans are repaid within 18 months or reduced significantly within 12 months.
ANZ said gross margins on mortgages have fallen by 20 basis points over the past two years because of more competition and greater reliance on higher-cost wholesale funding. Despite that, the bank said broker commissions had changed little.
ANZ managing director of mortgages Chris Cooper said the broker market was strategically important but that it was unlikely the overall margin decline would be reversed.
"As a result, ANZ has no choice but to make changes to protect its business and to ensure customers using brokers continue to receive competitively priced mortgages," he said.
He said the bank remained committed to working with brokers.
Earlier this year Bank of Queensland exited the broker channel, focussing instead on selling mortgages through its new branch network.
ANZ said gross margins on mortgages have fallen by 20 basis points over the past two years because of more competition and greater reliance on higher-cost wholesale funding. Despite that, the bank said broker commissions had changed little.
ANZ managing director of mortgages Chris Cooper said the broker market was strategically important but that it was unlikely the overall margin decline would be reversed.
"As a result, ANZ has no choice but to make changes to protect its business and to ensure customers using brokers continue to receive competitively priced mortgages," he said.
He said the bank remained committed to working with brokers.
Earlier this year Bank of Queensland exited the broker channel, focussing instead on selling mortgages through its new branch network.
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