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Mortgage lending grows but other lending grows faster

While mortgage lending grew in 2001 and still dominates New Zealand bank’s loan books, it declined as a proportion of total lending assets, according to KPMG’s latest annual survey of financial institutions.

Tuesday, May 14th 2002, 7:17PM

by Jenny Ruth

Mortgage lending grew $4.3 billion in the year but fell from 47% of total lending to 44%.

The reason for that is that other lending grew even faster. Commercial and financial lending rose from 32% of total lending to 35%.

National Bank dominates the mortgage market with a book totalling $13.7 billion, which was up $700 million on 2000, while ASB Bank enjoyed the biggest increase in its mortgage portfolio, up 14%, or $1.3 billion to $10.9 billion.

Bank of New Zealand is the smallest of the big five mortgage lenders with an $11.2 billion book, up $900 million from 2000, followed by ASB and then ANZ Bank at $11.2 billion, up $800 million from 2000, and WestpacTrust with $13.1 billion, up $500 million on 2000.

KPMG says the split between fixed and floating rate mortgages hasn’t changed significantly over the past three years, currently at 60% fixed and 40% floating.

Between the banks there are significant differences. BNZ and National Bank closely replicate the national average while ASB Bank has only 57% fixed. ANZ Bank has consistently had more fixed rate mortgage customers than the average. While the proportion fell in 2001, it still has 67% in fixed rate loans. WestpacTrust has only 54% of its customers in fixed rate loans.

"The mortgage lending market is arguably the most competitive market in the New Zealand financial services industry, given the number of participants involved," KPMG says.

The survey also found New Zealand banks had yet another year of record profitability in 2001 as they managed to increase average interest margins slightly after declines in each of the previous eight years.

New Zealand registered banks recorded a 17.9% improvement in underlying performance during the year while net profit rose 18.4% from $1.7 billion to $2 billion.

Their weighted average interest margin, the difference between what banks pay for deposits and what they collect from loans, climbed 2 basis points to 2.31%.

All the major banks increased net interest income with Bank of New Zealand’s up 13% to $88 million and National Bank’s up 11% to $81 million.

WestpacTrust was the only major bank to show a continued fall in margins, down 22 basis points, but a $4.3 billion rise in lending assets still saw it lift net interest income $21 million.

For the third year running, National Bank improved its interest margin from 2.59% to 2.63% while ANZ Bank’s rose 8 basis points to 2.67%

Andrew Dinsdale, chairman of KPMG’s banking group, says bank margins are likely to improve further in the short term, given the rising interest rate environment.

Improved consumer confidence is driving mortgage lending growth particularly in Auckland. "All the evidence we’ve had is that it’s a pretty spectacular story in Auckland," Dinsdale says.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 ▼6.79 ▼6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 ▼7.29 ▼7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 ▼7.39 ▼7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 ▼6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 14 March 2024 9:32am

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