Bank looks to expand business-lending offering
Hein Wegdam (pictured) is a relatively fresh face at ING Australia.
He joined as head of business banking in July 2024, having made the move from ING’s spiritual Dutch homeland, where he was last seen acting as regional director business banking, all the while heading up ING Netherlands’ real estate finance department.
Wegdam’s extensive CV is going to be put to the test in Australia, as the digital-only bank seeks to make a bigger splash in the super-competitive world of business lending.
ING is hardly starting from scratch – it has one of the largest shares of the home lending market outside of the Big Four. These homeowners, Wegdam told MPA, are beginning to demand more from their credit providers.
Beyond mortgages
“We have over 2 million retail customers, many of whom are small business owners,” said Wegdam. “The demand is coming from them, they want to be able to do all their banking in one place and we want to support them.”
But it’s not just the customers making these demands – so are brokers. “They have SME customers that are working with them for residential loans, but many are interested in commercial property too.” Wegdam said. “They want to work with one broker for all their needs.”
Wegdam didn’t give a precise figure when pushed on what percentage of the business-lending market ING is aiming for, but he was clear in his approach to growth.
In recent months, ING has adjusted its policy settings to make it easier for more SMEs to borrow with the bank. Specifically, loan-to-value ratios across all commercial property products have increased, sales and origination processes have been remapped, and technology has been invested in to speed up the time to yes.
“We have had a commercial property portfolio for some time, but this has been limited to a subset of SMEs. We’re now broadening out our offering, meaning more brokers can take advantage of it,” said Wegdam.
He teased more enhancements to come, including “a range of SME deposit products that will be available to brokers to sell”.
Brokers to the fore
Brokers will be “critical” in advancing ING’s business-lending ambitions, said Wegdam. “We see brokers as being a vital partner in helping to connect us to more small businesses, helping us to build our business bank.”
Broking trends are certainly drifting in the right direction. Diversification has emerged as a major talking point across the industry, so much so that leading mortgage aggregator LMG dedicated its latest Growth Summit to the matter.
Wegdam said he is “very in tune” with broker diversification. “In recent years we’ve noticed there’s more broker demand for commercial lending. Our business banking strategy addresses this demand and makes it easier for brokers to offer financing for both residential and commercial customers.”
It is not going to be a walk in the park. On the one hand, there are the Australian banking behemoths comprising the Big Four and Macquarie to contend with, while non-bank lenders have cemented their worth in the SME space via flexible lending products and income verification.
Under Best Interests Duty (BID), brokers must do what’s best for their clients – so how does ING intend to put the best deals on the table?
“We know the term ‘best deal’ can mean different things to different people, so we’ve focused on having an attractive proposition on various fronts,” said Wegdam. “For example, our interest rates are competitive across the loan amounts offered and we don’t charge an interest rate premium for investors or interest only.
“For these reasons and many more, we have proven the ING proposition can be a compelling option for SME borrowers in Australia.”
A matter of confidence
To acknowledge the elephant in the room, business sentiment is not exactly roaring in Australia right now.
The latest NAB business confidence indicator plummeted to -3 in March as an uptick in profitability was offset by lower trading conditions and employment. It was the lowest point for business confidence since November 2024.
At face value, it appears to be a difficult time for a bank to invest time and resources in expanding its business-lending offering, but Wegdam is unperturbed.
“More than 95% of businesses in Australia are SME and they contribute greatly to Australia’s economy,” he said. “As with any sector there will always be highs and lows but our decision to ramp up our business offering reflects our long-term view of the SME lending market’s potential.”
Wegdam also drew attention to the fact that ING has a track record in other markets across the globe. “Drawing on our extensive expertise and experience, we recognise Australia as a prime market for business banking and we can’t wait to be able to support brokers even further with their SME customer needs.”
