ANZ mortgage market share dips

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ANZ Bank's share of the mortgage market continued to slide in the June quarter although its profitability improved markedly as a result of lower charges for bad loans.

Sunday, August 29th 2010, 9:17PM

by Jenny Ruth

ANZ's June quarter general disclosure statements for its overall New Zealand operations show its total mortgage books shrank by $24 million to $53. 65 billion in the three months ended June 30.

However, those figures aren't comparable with the figures reported by the other banks and are overstated because they are prepared under Basel 1 rules and include business loans secured by residential mortgages.

Combining figures for its subsidiary, ANZ National Bank, which are reported under Basel II rules like the other banks, and its New Zealand branch, which are reported under Basel 1 rules, to get a number which most closely matches the other banks', ANZ's mortgage book totalled $50.89 billion at June 30, up $134 million from March 31.

Using the latter figures and those of the Reserve Bank as a proxy for the mortgage market, ANZ's share of mortgages written by registered banks eased to 30.93% at June 30 from 31.02% at March 31, although it remains the largest mortgage lending bank by a wide margin.

Lending growth remains subdued as new lending is being offset by customers paying off debt and accessing more diverse funding sources”, ANZ's New Zealand chief executive Jenny Fagg says.

Overall group net profit rose to $234 million for the three months ended June 30 from $56 million in the same quarter last year. That largely reflects a big drop in charges against profit for bad loans to $83 million in the latest quarter from $244 million in the year-earlier quarter.

Charges for mortgages gone bad rose only $12 million in the three months, taking mortgage charges for the nine months to $114 million.

ANZ established its New Zealand branch in January 2009 to get around Australian prudential rules preventing an Australian bank from lending more than 50% of its equity to a subsidiary. Before that it operated solely through its subsidiary.

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