The Australia and New Zealand Banking Group (ASX: ANZ) share price could fall if it continues to lose market share.
ANZ is a leading Australian and New Zealand banking institution, with a presence throughout the oceanic region. ANZ is one of the Big Four Aussie banks and derives much of its revenue from mortgages, personal loans and credit.
ANZ’s Losing Market Share
Today, ANZ was in the headlines with the Australian Financial Review reporting that the major ASX bank has been losing market share in the home lending segment.
The Australian Prudential Regulation Authority (APRA) statistics have shown that ANZ’s market share has fallen from 15.65% in the owner-occupier home loan market and 13.8% in investment home loans respectively, which is down from 16.4% and 14.7% respectively a year ago.
It looks particularly painful when you compare that to Commonwealth Bank of Australia (ASX: CBA) with its home lending growing at 1.3 times the market average. Also, Westpac Banking Corp
(ASX: WBC) has a strong market share with a 21.1% of owner-occupier home loans and 28.7% of housing investment loans.
Obviously it’s far better for ANZ to lend profitably rather than try to lend as much as possible. Avoiding a bad loan that gets written off is far better than writing several loans earning 2% profit a year where one could go bad.
Is The ANZ Share Price?
The ANZ share price is up 11.9% over the year, plus the dividend it has paid during the year. It has been a solid performer.
With the news today that house prices in Sydney and Melbourne look decidedly better, ANZ shareholders may be able to feel happier about its loan book.
With interest rates falling and Australian house prices perhaps on course for a recovery, I think it’s important that we see ANZ’s arrears start to improve, or else the banks will still be on my ‘avoid’ list. ANZ has an attractive fully franked dividend of 6%, but I think the reliable shares in the free report below could be better picks for a reliable portfolio.
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