Service glitches hurt ANZ

By Tim Boreham 24mar01

THE ANZ Bank has lost valuable share of the new mortgage market because of serious service problems in its broker-based lending operations.

Mortgage brokers, who account for 25 per cent of the bank's total home lending, have complained of approvals taking a week or more, rather than the generally accepted 48 hours. The glitches have sent the bank's share of new mortgages from a monthly average of 20 per cent last year to a mere 12 per cent in January and February.

Ironically, the problems arose because the bank chose the wrong time to implement a $20 million system aimed at improving customer delivery.

The bank was also caught out by higher than expected mortgage demand in January and February – a period expected to be a low season for lending demand after housing starts slumped to a record low late last year.

ANZ head of mortgages Greg Camm admitted yesterday that the bank had "dropped the ball" on service delivery in the eastern states.

He said the bank decided in November to install an automated mortgage approval system, called Mortgage Origination Solutions, early this year.

However, expectations that this would be a quiet period were shattered by a round of local interest rate cuts precipitated by the US Federal Reserve's shock 50 basis point reduction in January.

"We took the business judgment that January and February would be quiet months for mortgage applications," Mr Camm said.

"I'm taking a lot of heat internally for this, but back in November, anyone would have made the same decision."

Several brokers confirmed they had been sending business elsewhere, with Westpac and the National Australia Bank's HomeSide operation believed to be the main beneficiaries.

"The ANZ hasn't been able to give a quick turnaround in recent times," one broker said.

"But they've got good products and it looks like they've been a victim of their own success to an extent."

http://www.theaustralian.com.au/common/story_page/0,4511,1829595%255E643,00.html

-- Martin Thompson (mthom1927@aol.com), March 24, 2001