ANZ Plus launches digital home loans, plots expansion

afr.com:

ANZ’s new digital bank, known as ANZ Plus, began offering home loans last week to a very limited number of customers, but CEO Shayne Elliott says in a few years the platform could be the dominant distribution channel for its mortgages and allow them to be originated at a much lower cost.

Briefing analysts on its full-year results on Monday, Mr Elliott revealed ANZ Plus mortgages had been quietly launched to a select group last week. Applications are done over smartphones and can be finalised within 45 minutes, he said, “dramatically reducing the time and cost of assessment, approval and settlement” for the bank.

Since it wasslowly launched 18 months ago with limited capabilities, ANZ Plus has attracted 500,000 customers (with around 40 per cent new to ANZ) and $10 billion in deposits. This has exceeded internal expectations, as ANZ offered higher interest rates for Plus than its normal savings products.

ANZ CEO Shayne Elliott presents the bank’s results on Monday. Arsineh Houspian.

The growth is significantly faster than UBank, a similar digital bank run by National Australia Bank, Mr Elliott said in a dig at his Melbourne-based rival. “UBank has been in place 15 years, and their entire balance sheet is $18 billion. We’ve got to $10 [billion] in 18 months,” he said.

For now, to get an ANZ Plus mortgage, borrowers need to be receiving PAYG income, have less than a 80 per cent loan-to-value ratio on the property, want no offset account, be borrowing themselves rather than with a partner, and be an existing ANZ Plus customer. Furthermore, it is only available for property refinancing on Android phones, although an iOS version is expected to launch in a few weeks.

“That is pretty narrow today,” Mr Elliott admitted, but “we