Since Friday’s closing bell, the Westpac share price is up 2.2%. National Australia Bank Ltd (ASX: NAB) shares are up 4.5%. Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares have gained 3.7% and Commonwealth Bank of Australia (ASX: CBA) shares are up 2.8%.
This compares to an 0.8% boost for the ASX 200.
What’s the latest news from Westpac?
Westpac hasn’t released any price-sensitive news to the ASX since 26 May when it announced a deal with BT Funds Management Limited.
They plan to merge BT’s personal and corporate superannuation funds with Mercer Super Trust. Westpac also plans to sell its Advance Asset Management business to Mercer Australia.
However, this week Westpac has announced some female-friendly changes to its lending criteria.
In a press release, Westpac says it wants to “help women into home ownership” and make it easier for childcare operators to expand.
Westpac noted these changes were “supporting Government plans to grow the childcare sector”.
During the election campaign, Labor described improving childcare as a “fundamental economic reform”. The government plans to introduce a range of measures that it says will reduce childcare costs for 96% of families.
Labor argues that increasing women’s job participation rate will enable households to increase their incomes while also boosting the economy.
Home loans made easier for women and health workers
Westpac has a lenders’ mortgage insurance (LMI) waiver program that makes it easier for male and female borrowers in the medical profession to get a home loan.
Under the program, Westpac will issue loans at a 90% loan-to-value (LVR) ratio, instead of the usual 80%, without asking the borrower to pay LMI.
Now, the bank is adding eight allied health professions that “have a strong female workforce representation” to the waiver program. The professions are osteopaths, podiatrists, audiologists, occupational therapists, psychologists, speech pathologists, radiographers, and sonographers.
What is LMI?
LMI is a one-off cost paid by borrowers when they have less than a 20% deposit. The insurance protects the bank if the borrower can’t make their repayments.
LMI on a typical family home purchased for $650,000 would cost the borrower about $8,000, according to Westpac.
Applicants still have to meet other criteria, such as minimum income thresholds.
Government and corporate priorities align, says Westpac
Westpac chief executive of consumer and business banking Chris de Bruin said:
… saving the traditional 20 per cent of the value of a property purchase price can take prospective buyers years to achieve. We have recently expanded our LMI Waiver to include additional health professions … where women make-up most of the workforce. This will enable more women to purchase their home sooner with a reduced deposit and without the expense of mortgage insurance.
Westpac is also introducing flexible lending criteria and priority servicing for childcare centre operators. This includes reduced equity requirements and cheaper lending rates and establishment fees.
De Bruin said:
The New South Wales Government recently announced a $5 billion childcare growth plan and other Governments are pursuing similar policy objectives.
When Government policy and corporate sector commitment are aligned, change can be driven quickly. We know that access to finance is a key barrier to expansion, so we’re making it easier for childcare businesses to get the funding they need to grow.
Westpac also says it will introduce a training program to encourage more women into home and business lending roles. Up to 100 new jobs will be made available to internal and external applicants.
Westpac share price snapshot
In 2022 so far, Westpac shares have tumbled by 9.5%. This compares to a fall of 8.2% for NAB, 12.15% for CBA and 21.7% for ANZ.
As my Foolish colleague Sebastian reported yesterday, Westpac offers a dividend yield of approximately 6.2%.