Speaking to home loan stress testing, ANZ boss Shayne Elliott says dropping standards would help few customers at the bank.
Banks are forced to assess new and refinancing home loans at interest rates 3 per cent higher than the market rate, but CBA, Westpac and NAB have signalled they would rethink this buffer to help rescue so-called “mortgage prisoners” – those struggling to afford their repayments but cannot refinance to a better deal because they don’t pass stress testing hurdles – if borrowers met certain criteria.
Elliott said the current buffer was appropriate given “the difficulty is that we don’t know what the future holds”.
“If we were sitting here two or three years ago, I don’t think any of us would have said rates would rise by 3 to 4 percentage points,” he said.
The Australian Financial Review understands ANZ believes a reduced serviceability buffer would only help less than 1 per cent of its mortgage book.
ANZ chief risk officer Kevin Corbally said a 3 per cent buffer was “responsible”.
“If we reduced it [the buffer] to a lower level, say 1 per cent, it wouldn’t have materially helped our customer base,” Corbally said.
Committee chairman Daniel Mulino then asked about bank branch closures.
Elliott said when he had taken on the role of CEO, ANZ had 678 branches in Australia, but that had since reduced to 391.
“Most of the closures have happened in capital cities. There has been essentially no closures in regional and very remote Australia,” he said.
“The reality is remote towns, parts of the country, are difficult to service in general … from a banking perspective, we are lucky we are able to provide most of those services in a different way … we are not in physical goods, like a petrol station.”
