Almost 85% of broker volume was sent to just 10 lenders last quarter. The top 10 broker lenders have not been this dominant in the two years since we started tracking these stats.
The third quarter also saw a migration in broker volumes to non-bank lenders, which isn’t surprising given the exit of CIBC’s FirstLine brand from the broker market.
Here’s a rundown of how the top 10 broker lenders performed last quarter….
The Big 5
1) Scotiabank (SMA)
23.6% market share, +6.0 ppsY/Y
Scotia has been the biggest beneficiary of FirstLine’s departure. Despite somewhat average rates, SMA has scooped an enormous six percentage points of market share in just 12 months.
2) First National 16.0% market share, +2.1 pps Y/Y First National currently has no challengers for second place. That said, it lost a hefty 2.9 pps of share versus the second quarter. Part of that was likely due to it cutting commissions and eliminating its “Wizard Spending Account” incentive for status brokers. On a positive note, it offered one of the best adjustable-rate promos in the market at prime – 0.35%.
3) MCAP 9.5% share, +2.9 pps Y/Y MCAP vaults into third spot. It’s had decent rates and it has also picked up its share of FirstLine converts. Broker compensation reductions on one- and two-year terms obviously haven’t hurt it much.
4) TD Canada Trust 8.2% share, -3.9 pps Y/Y
Does anyone else find it curious how TD missed a major opportunity to amass share when FirstLine wound down?
5) Street Capital 7.8% share, +2.5 pps Y/Y
Street falls one notch to fifth, but its share has held steady since Q2. It has also posted a nice pickup in business since 2011. The company’s three-year fixed promo was market leading in Q3.
The Balance of the Top 10
6) Home Trust 6.0% share, +0.8 pps Y/Y This comes on the back of non-prime/uninsured originations, which grew 34% in Q3.
7) ING Direct 4.6% share, -0.4 pps Y/Y It will be interesting to see how many brokers try to reach ING’s status volume targets in 2013, given the uncertainty about what Scotiabank plans to do with ING’s broker channel. That said, brokers still drive the bulk of ING’s mortgage volumes. Word is that Scotia wants to grow ING’s broker business if it can do so cost effectively. Meanwhile, ING has been offering competitive rates and still has among the best mortgage features in the business, two good reasons to route it business regardless of the merger.
8) National Bank of Canada 3.6% share, -1.7 pps Y/Y Virtually every National Bank broker in the country was disappointed when NBC raised its All-in-One (AIO) rate to prime + 0.75%. The AIO is its headline product. Restoring it to prime + 0.50% and making a few more common sense underwriting exceptions would go a long way in getting share back. On the plus-side, NBC has made it easier for brokers to qualify for its top-level efficiency bonus, which pays more than most lenders.
9) Merix Financial 3.1% share, –0.5 pps Y/Y
Merix keeps winning service awards but that hasn’t been enough to grow its share in the last year.
10) Laurentian Bank 2.5% share, +0.6 pps Y/Y
Laurentian breaks into the top 10 for the first time since we started tracking market share.
Volume at mortgage banks has jumped nearly 29% year-over-year.
Xceed (+402%), Radius Financial (+174%) and AGF Trust (+151%) were the biggest percentage gainers in terms of volume year-to-date, albeit their growth is coming off a much smaller base than the top 10 lenders.
Despite improved service levels and additional products, British Columbia’s Coast Capital Savings has seen its quarterly year-over-year broker volume plunge 88%. That’s what happens when your rates go from the best in the province to above average.
Source: D+H puts out a terrific, non-public report called Lender Insights, which compiles lender market share data in the mortgage broker industry. We receive data from that report via third party sources and have quoted it here. This data is not confirmed, but is believed reliable. Note: These market share figures do not count MorWeb volumes but do provide a good proxy of overall market share.
Rob McLister, CMT
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