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ING steps up investor housing loans in hot Australian market
March 16, 2017 / 7:02 PM / 9 months ago

ING steps up investor housing loans in hot Australian market

SYDNEY, March 17 (Reuters) - ING Groep NV’s Australian arm expects to increase lending to housing investors this year, allowing it to gain market share as rivals pull back for fear of breaching regulatory caps, Chief Executive Uday Sareen said.

ING is Australia’s fifth-largest retail bank in household savings balances and mortgages and is looking to advance on its “Big Four” rivals through investor loans and new products like insurance, credit cards and personal loans.

Its past focus on owner-occupier mortgages means it can increase its investor book while rivals including Commonwealth Bank of Australia (CBA) are restricted from doing so as they risk breaching rules limiting growth in investor loans to 10 percent.

“I don’t think we’ll be contracting (this year),” Sareen said of ING’s investor loan book in an interview with Reuters.

“Our investor share is below 2 percent. If you have that kind of market share and some of our larger competitors considerably slow down there is still volume coming through.”

The Reserve Bank of Australia on Monday indicated that regulators could impose further restrictions on investor lending if needed to head off risks in the housing market, where home prices in Sydney and Melbourne have reached record highs.

The value of ING’s housing loans to investors fell by 6.7 percent in 2016 as it focused on increasing market share in owner-occupier loans, according to statistics from the Australian Prudential Regulation Authority.

However, ING’s investor loans rebounded by 0.5 percent in January relative to December as Australia’s biggest lender, CBA, began to turn away investors looking to refinance loans and raised rates on interest-only investor loans.

Deutsche Bank analysts on Wednesday said regional lender Bendigo and Adelaide Bank Ltd also appeared close to breaching the 10 percent investor loan cap, but other major banks still had room to lend. (Reporting by Jamie Freed; Editing by Stephen Coates)

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