ASB Bank Limited Prioritizes Consistency Over Market Share, Says CEO

Highlights:

• Consistent Mortgage Origination: ASB Bank Limited (ASB) has maintained a steady 55-60% of home loan originations through mortgage advisers over the past eight quarters.
• Strategic Interest Rate Cuts: Following the Reserve Bank’s OCR cut, ASB reduced all home loan rates, distinguishing itself from competitors who limited cuts to floating rates.
• Long-Term Stability: ASB CEO Vittoria Shortt emphasizes a long-term approach over chasing market share, prioritizing consistency and competitiveness in the mortgage market.

Mortgage Advisers Remain Crucial to ASB’s Strategy

ASB Bank Limited (NZX: ASB) continues to prioritize a steady and consistent approach in the mortgage market, according to CEO Vittoria Shortt. Speaking to TMM, Shortt revealed that mortgage advisers have consistently accounted for 55-60% of ASB's home loan originations over the past eight quarters. Despite fluctuations in the market, Shortt emphasizes the importance of maintaining stability in third-party origination. "I like consistency if at all possible," she noted, underscoring the bank's commitment to its long-standing partnerships with broker groups.

ASB’s Unique Approach to Interest Rate Cuts

Following the Reserve Bank’s recent cut to the Official Cash Rate (OCR) — the first in four years — ASB took a different path compared to its competitors. While other major banks, including ANZ and BNZ, limited rate cuts to floating rates, ASB reduced all its home loan rates. This decision raised questions about whether ASB was attempting to regain lost market share after a slowdown in lending in late 2023.

Shortt, however, dismissed these speculations. "We don't chase market share for market share's sake," she stated firmly, adding that such tactics could lead to "silly things" that might jeopardize long-term goals.

Long-Term Focus Over Short-Term Gains

Shortt stressed that ASB Bank Limited (ASB) is more focused on a long-term strategy that ensures competitiveness, a strong service proposition, and appropriate credit settings. "It's really important that you consistently show up in market... What I don't want to do is be up and down and inconsistent," she explained.

While acknowledging that ASB’s different pricing approach led to a temporary loss of market share, Shortt remains confident that their consistent strategy will prove beneficial in the long run as input costs shift and market conditions evolve.

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