ASB's mortgage book shrinks for a seventh successive quarter

The loan-to-valuation ratio (LVR) table in ASB Bank's latest disclosure statement shows its mortgage book shrank by $38 million to $37.36 billion in the three months ended December. Its book has declined by $545 million since March 2010.

But even though its book is shrinking so much, ASB's figures also provide some confirmation to anecdotal evidence that some banks are loosening their lending criteria.

Its home loans with LVRs of 80% and below fell by $584 million to $29.97 billion in the three months ended December.

By contrast, its loans with LVRs between 80.1% and 90% rose by $140 million to $4.12 billion in the quarter while loans with LVRs above 90% leapt by a whopping $406 million to $3.28 billion.

ASB has only been reporting these figures in their current form since its March 2011 statement. Since then, its mortgages with LVRs above 90% have soared by $959 million and have gone from accounting for 6.2% of its total mortgage book in March to 8.8% in December.

Conversely, over the same period its loans with LVRs 80% and below have shrunk from 83.7% of the total book to 80.2%, or by $1.37 billion.

ASB's net profit for the three months ended December jumped 46.6% to $195 million, taking net profit for the six months ended December to $372 million, up 31.4%.

Net interest income rose 5.9% to $341 million in the quarter while other income rose 24.1% to $103 million. As well, charges against profit for bad loans fell to just $4 million from $37 million in the year-earlier quarter.

Comments from our readers

On 2 March 2012 at 10:38 am Just saying said:

The reporting of LVR data changed from the March 2011 quarter onwards. Prior to this the LVR data was reported as a single figure and included on and off balance sheet exposures. Since March 2011 they have been reported separately. So while the on balance sheet exposures have decreased, the off balance sheet exposures have increased - if you combine the two (to be consistent with pre-March 2011 data), the total LVR exposure has continued to increase. Not sure what constitutes on and off balance sheet exposures, perhaps you could provide an explanation.

ASB's mortgage book shrinks for a seventh successive quarter

Commonwealth Bank of Australia-owned ASB Bank's mortgage book shrank for a seventh successive quarter in the three months ended December although profit rose strongly.

Friday, March 2nd 2012, 9:13AM 1 Comment

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