ANZ suffered a 3 per cent fall in Australian home loan balances during the year to September and - a fall of A$7 billion - a 12 per cent fall in credit card and personal loan balances.The bank said lending volumes fell as a result of lower system growth, competition, more conservative home loan origination risk settings and execution challenges.Australian home lending share fell from 15.5 per cent to 14.3 per cent over the year. It is a loss of share that the bank will find hard to recover.For a bank going through a major simplification program that involves relying more on core business, these numbers are a disaster.ANZ chief financial officer Michelle Jablko said the bank had "execution issues" that contributed to its poor performance in mortgage sales. "We had better assessment times in the second half and the rate of decline slowed," Jablko said.With its back office sorted the back launched a home loan marketing campaign and saw a significant pickup in loan applications. Applications picked up 30 per cent in the second half and have continued at that level.However, she cautioned that the improvement would be offset by other factors. There has been a significant shift from interest-only lending to principal and interest, with a consequent increase in loan amortisation.The proportion of borrowers paying interest-only has fallen from 31 per cent in 2016/17 to 15 per cent today.In addition, there has been a substantial increase in loan prepayments. The proportion of borrowers ahead of their standard repayment schedule has increased from 71 per cent in 2016/17 to 76 per cent today.The bank is holding $27 billion in offset balances, which is about 10 per cent of its home loan portfolio.