NATIONAL Australia Bank chief Cameron Clyne's fight for a larger share of Australia's mortgage market continues to bear fruit.
NAB increased mortgage lending 15.8 per cent in May compared with the same month a year earlier, according to Credit Suisse analysts.
Rivals Commonwealth Bank, Westpac and ANZ posted slower growth in mortgages, which account for 63 per cent of all lending.
NAB has made a post-financial crisis resurgence after Mr Clyne scrapped fees, cut loan rates and began an advertising campaign featuring a "break-up" with rivals.
The strategy is not without risks as ratings downgrades and the weakest credit demand in three decades threaten banks' profits.
"They're clearly gaining market share, and the stock price is reflecting a strong improvement relative to peers," said Mark Nathan, who helps manage about $5 billion of assets at Arnhem Investment Management.
"What isn't clear is the profitability of that gain in market share and the quality of customers they're packing in."
NAB's outperformance comes amid mounting concern about the profitability of the nation's lenders. Having weathered the turmoil unleashed by the 2008 collapse of Lehman Brothers without government bailouts, the banks face tumbling demand for home loans after the Reserve Bank boosted borrowing costs seven times between October 2009 and last November.
In the process, RBA governor Glenn Stevens has crunched household appetite for debt, which more than doubled in the past 15 years as a proportion of disposable income to 155 per cent in the March quarter.
That is higher than the 133 per cent ratio Americans accumulated at the height of the US subprime mortgage boom.
Credit to home buyers in May increased at the slowest annual pace since 1977, when RBA data began.
CBA accounted for 29 per cent of the mortgage market in May, Westpac had 27 per cent, followed by National Australia's 16 per cent and ANZ's 15 per cent, according to APRA figures.
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