ASB's home loan book shrinks - again

ASB Bank's mortgage book continued its downward slide in the June quarter and its profit was flat.

Thursday, September 13th 2012, 6:22AM

by Jenny Ruth

However, it's the safest part of its book which is shrinking while riskier mortgages show strong growth.

ASB's June quarter disclosure statement shows its mortgage book shrank by $39 million to $37.39 billion in the three months ended June 30 while total mortgage lending by registered banks rose by $1.69 billion in the quarter – as previously reported, ANZ Bank accounted for $1.09 billion of the quarter's growth, a record for any New Zealand bank.

ASB's mortgage book has shrunk in nine of the last 10 quarters – it showed $67 million growth in the March quarter. Its market share at June 30 stood at 21.8%, down from 22.01% at March 31 and 22.36% at June 30 last year.

ASB's mortgages with loan-to-valuation ratios (LVRs) up to 80% shrank by $507 million in the quarter and by $615 million in the year ended June.

By contrast, mortgages with LVRs above 80% and up to 90% grew by $197 million in the June quarter and by $675 million in the year ended June. Mortgages with LVRs above 90% grew by $271 million in the June quarter, although they shrank by $79 million in the year ended June.

ASB's net profit for the quarter was flat at $153 million with its 8.3% growth in net interest income offset by charges against profit for bad debts rising to $20 million compared with an $8 million credit in the same quarter last year.
For the year ended June 30, net profit rose 20.6% to $685 million.

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