About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Friday, September 20th, 6:10PM
Mortgage Rates Daily Commentary
Friday 20 September 2019  Add your comment
SBS rate cut; OCR preview

Good morning.

As Spring kicks in, another bank has slashed mortgage rates.

SBS Bank’s 3 year rate drops to 3.89%, level with ASB. Check out our rates table here.

Meanwhile, economists have told us they don’t expect the Reserve Bank to cut the Official Cash Rate next week. See why here: [READ ON].

rss
Latest Headlines

ASB: Conservative but not under the crunch

New bank disclosure rules reveal ASB Bank's mortgage book is particularly conservative although there's also evidence the global credit crunch is starting to nibble.

Monday, June 9th 2008, 6:02AM

by Jenny Ruth

If the other bank's mortgage books have similarly conservative profiles, that suggests reports of snowballing mortgagee sales may be exaggerated.

ASB is the first major bank to report under the new Basel II rules which require disclosure of loan-to-value (LVR) ratio details. They show at March 31 only 15% of ASB's $39.79 billion mortgage book had LVRs above 80% and only 3.9% was above 90%.

At the other end of the spectrum, 31.2% of the book, or $12.46 billion of home loans had LVRs below 60%.

ASB's 90-day past due assets, impaired assets and assets under administration jumped sharply to $151 million at March 31 compared with $95 million a year earlier, although that's still tiny at just 0.4% of the total book.

The bank's net profit rose 6.8% to $157 million for the March quarter and profit for the nine months ended March was also up 6.8% to $424 million.

The downside to the new rules is the figures for the mortgage book aren't comparable with what the bank reported under the Basel I rules. The $39.79 billion book includes $4.61 billion in undrawn commitments (loans approved but not drawn down) and other off-balance sheet exposures.

ASB's head of finance and risk management Stewart McRobie says the $35.17 billion figure resulting from excluding those undrawn commitments can't be compared with the $34.88 billion figure for the bank's mortgage book reported at December 31.

"Had the number been produced and computed and reported, it would have been $35.875 billion," McRobie says. In other words, the mortgage book would have grown by $1 billion under the old rules.

McRobie says a major difference now is where ASB knows loans secured by residential mortgages are being used for business purposes it now classifies them as corporate exposures to small and medium enterprises. He agrees ASB doesn't always know when home loans are being used to fund businesses.

Banks had an incentive under the old rules to classify all loans secured by residential mortgages together, regardless of what the funds were used for, because such loans required less capital. The Basel II rules allow bank's to assess the underlying credit quality of all loans and provide appropriate capital levels.

Using Reserve Bank data as a proxy for the market, $35.17 billion of home loans at March 31 would be 23.4% of the mortgage market while $35.875 billion would be 23.9%. The December figure gives a 23.8% market share figure.

« Mortgage Express and the great PLANRecord number of pre-approvals »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.15 ▼4.04 4.49
ANZ Special - 3.65 ▼3.54 3.99
ASB Bank 5.20 4.15 4.09 4.39
ASB Bank Special - 3.65 3.59 3.89
BNZ - Classic - 3.65 ▼3.49 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
Housing NZ Corp 5.19 ▼4.15 ▼4.09 ▼4.39
HSBC Premier 5.24 3.35 3.35 3.35
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.65 3.85 3.95 3.89
Kiwibank 5.80 4.30 4.34 4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.59 3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.69 4.79 -
Resimac 5.30 4.86 4.14 4.19
Lender Flt 1yr 2yr 3yr
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.69 3.69 ▼3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.65 3.59 3.99
The Co-operative Bank - Standard 5.15 4.15 4.09 4.49
TSB Bank 6.09 4.65 4.59 4.85
TSB Special 5.29 3.85 3.79 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.34 - - -
Westpac Special - 3.65 ▼3.54 3.99
Median 5.35 4.15 4.09 4.19

Last updated: 20 September 2019 9:30am

Previous News

MORE NEWS»

News Bites
Compare Mortgage Rates
Compare
From
To
For

To graph multiple lenders, hold down Ctrl key while clicking in list box

Also compare rates to OCR
Find a Mortgage Broker

Add your company

Use map
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com