ANZ's new mortgage lending all but dried up in Dec qtr

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ANZ National Bank appears to have all but closed up shop on the mortgage lending front.

Wednesday, March 11th 2009, 5:51AM

by Jenny Ruth

Its December quarter general disclosure statement shows the bank increased its mortgage book by just $47 million to $49.67 billion in the three months.

Using Reserve Bank figures as a proxy for total lending on residential housing by banks, ANZ accounted for just 1.9% of the increase in the three months ended December 31.

Total bank lending on residential housing increased by $2.43 billion to $155.7 billion in the three months.

ANZ’s share of the market dropped to 31.9% from 32.38% at the end of September.

By contrast, the Government-owned Kiwibank, whose share of the market stood at 4.1% at the end of December, increased its mortgage book by $869 million to $6.39 billion in the three months.

ANZ also had a further $5.38 billion in off-balance sheet mortgages, largely loans approved but not drawn down. That compared with $5.4 billion in off-balance sheet mortgages at September 30.

ANZ seems to be working on improving the quality of its mortgage book.

Its mortgages with loan-to-value ratios (LVRs) above 90% at December 31 eased to 11.9% of its book from 12.3% three months earlier while those with LVRs between 80% and 89% were unchanged at 14% of the total book. Those with LVRs below 60% rose slightly to 42.5% of the book from 42% three months earlier.

Last week, ANZ reported net profit for the December quarter fell by $100 million, or 32.3%, to $210 million as its charges against profit for impaired loans jumped to $94 million from $32 million in the same quarter of 2007.

Of the latest quarter’s charges for impaired loans, $17 million was against retail mortgages, $30 million against other retail exposures and $47 million against corporate loans.

ANZ had $725 million in provisions for impaired loans at December 31, up from $478 million a year earlier, of which $133 million were retail mortgages, $189 million in other retail exposures and $403 million in corporate loans.

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