BNZ's mortgage book growth losing momentum, profit jumps

Bank of New Zealand's net new mortgage growth slowed to its lowest pace in more than two years in the June quarter although profit jumped 34.4%.

Wednesday, August 22nd 2012, 4:52PM

by Jenny Ruth

BNZ's June quarter disclosure statement shows its mortgage book grew by $156 million to $27.94 billion in the three months, down from $179 million in the March quarter.

BNZ's figures before the December 2010 quarter may not be strictly comparable, but it's clear that's its smallest quarterly inflow since the March 2010 quarter when it took in a net $126 million.

The latest inflow compares with the $227 million in net new mortgages in the December 2011 quarter, the $305 million in the September 2011 quarter and $337 million in the June 2011 quarter.

If Reserve Bank figures prove to be an accurate proxy for the figures in banks' disclosure statements, that means BNZ's share of mortgage lending by registered banks eased to 16.13% in the June quarter from 16.2% at March 31 and it accounted for 9.6% of net new lending by banks in the quarter.

Reversing the trend shown in the last few quarters in which BNZ's growth was mostly from mortgages with riskier loan-to-valuation ratios (LVRs), the bulk of BNZ's net new lending, $185 million, was from mortgages with LVRs below 80%. Those with LVRs between 80% and 89% grew $76 million but those with LVRs of 90% or more shrank $105 million.

BNZ's net profit for the three months rose to $176 million from $131 million in the June quarter last year, taking profit for the nine months ended June to $528 million, up 36.8% on the same nine months a year earlier.

Net interest income in the June quarter rose 8% to $378 million while charges against profit for bad debts fell to $12 million from $19 million in the June quarter last year.

« Kiwibank's mortgage growth momentum slows; need $200m in fresh capital

SBS mortgage book shrinks again »

Special Offers