AUSTIN We have remained relatively self-regulated in originations. We reprice our back-book loans in line with the average of the four major banks and, as a result, as they tighten up on investor and interest-only lending this has a natural knock-on effect on our book. But as we are less than 30 per cent interest-only and investor loans, our portfolio is not one that should cause any regulator any concern.

PLOUGHMAN The point I’d like to make clear from the outset is that it is not that the banks are not comfortable to lend. What they are not doing is buying market share. This is a massive market so even a tiny shift makes a very significant difference.

In regard to this continuum and where market players sit on it, the major banks have clearly moved away from the areas where they probably shouldn’t have been lending in the first place. Initially a large volume of this business went to the second-tier banks. It has now filtered down to the nonbanks.

With strong funding markets, we have been able to achieve a competitive advantage without sacrificing credit or price. All we have done is continue to be there, and the banks haven’t undercut us.

BARRY Australian mortgage market volume is A$350 billion (US$274 billion) per year, so a slight shift in appetite from the banks results in billions of dollars coming to specialist lenders. We estimate our market size is at least A$20 billion per year.

On top of the shift around appetite and price, we have also seen the banks handle the speed limits that have been put on them in different ways. There is a lot of volatility in terms and conditions for mortgage credit and it seems a bank can change its pricing almost on a daily basis.

From a borrower’s perspective, consistent providers of credit that offer high levels of service can win compared with what is on offer from the banking sector.

PLOUGHMAN Going back to 2014/15, we experienced large and smaller banks undercutting and driving market share through price. This has very much dissipated, creating a good opportunity for nonbanks. We have always offered a service proposition and borrowers are now looking at alternatives so, as long as the banks aren’t buying market share or undercutting at a price that doesn’t make financial sense, the nonbanks can compete.

BARRY Growth in the last 12 months has been stronger than La Trobe Financial anticipated, and we don’t see any reason for this to reverse. The theme that has played out has become more concrete as time has passed and the size of the opportunity has firmed up as well.

HARKNESS More prime-characteristic borrowers are coming into our pools as a result of uncertainty within the banking sector. All our portfolios are experiencing a reduction in credit enhancement and the rating agencies describe these as better portfolios relative to two or three years ago. Not only are we hitting growth targets but we are getting better quality and characteristics in our assets as well.

LAWLER As the banks have moved up the credit spectrum, whether it is how they treat collateral or income, there is an ever-increasing portion of the market that is unable to be served by the banks. This is why we are all seeing large volumes of higher-quality borrowers coming in to our books.