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Macquarie Group Ltd (ASX:MQG) is steadily increasing its footprint in the Australian banking sector, presenting a formidable challenge to the country's traditional big banks. Although best known for its global investment banking and asset management operations, Macquarie's banking and financial services (BFS) division has been a standout performer, showcasing significant growth over the past five years.
Significant Expansion in Home Loans
Recent reports highlight Macquarie's impressive growth in the home loan market. In July, the company’s mortgage book expanded by 1.6%, a notable increase compared to the broader market's growth of only 0.3%. This growth trajectory positions Macquarie as a serious competitor to the major banks, including Commonwealth Bank of Australia (ASX:CBA), Westpac Banking Corp (ASX:WBC), National Australia Bank Ltd (ASX:NAB), and ANZ Group Holdings Ltd (ASX:ANZ).
UBS analyst John Storey indicates that Macquarie has successfully capitalized on the broker channel, driving its market share in owner-occupier and investor lending to 5.5%. Storey attributes this growth to Macquarie's strategic focus and advantageous position from a lower base, which has made it easier for the bank to surpass system growth. The bank's mortgage book grew by AU$1.9 billion month-on-month, reflecting its aggressive market strategy.
Impact of Funding Cost Adjustments
Storey notes that recent adjustments in funding costs, following the TFF refinancing, have provided Macquarie with the flexibility to enhance its pricing strategies. This adjustment has allowed Macquarie to improve its competitiveness and drive further growth.
Comparison with Major Banks
In contrast to Macquarie’s impressive performance, other major banks have shown mixed results in July. The Australian Prudential Regulation Authority (APRA) statistics reveal that Commonwealth Bank and ANZ grew their mortgage books at a pace of approximately 0.4%, aligning closely with the overall loan system growth. Westpac’s mortgage book growth was stagnant for the month, while NAB’s mortgage book decreased by about AU$300 million.
On the business lending front, Westpac demonstrated robust growth, expanding its business lending book by more than three times the overall loan system growth, increasing its market share to 15.3%. Conversely, ANZ and CBA saw contractions in their business loan books, while NAB maintained its leadership position with a business lending market share of 21.96%.
