Bank reports show different mortgage risk appetites
The two New Zealand-owned home lending banks appear to have vastly different risk appetites.
Tuesday, June 24th 2008, 11:27AM
by Jenny Ruth
Only 3.6% of its book has LVRs above 90%.
By contrast, 17.5% of the Government-owned Kiwibank's mortgage lending is on LVRs above 90%. The only one of the four majors to report under the new rules so far, ASB Bank, had 15% of its $39.79 billion mortgage book with LVRs above 80% and only 3.9% was above 90%.
The bulk of Kiwibank's $4.85 billion mortgage book, $3.7 billion, or 76.6%, is on LVRs below 80%.
Unlike ASB Bank's, both TSB and Kiwibank say their total mortgage books reported under the new rules are directly comparable to what they reported under the old Basel l rules.
That means Kiwibank's mortgage book grew by about $0.38 billion during the March quarter while TSB Bank's grew by less than $10 million.
Using Reserve Bank data as a proxy for the mortgage market, TSB's market share has dropped slightly to 2.21% from 2.24% at the end of December while Kiwibank's has climbed from just over 3% to 3.2%.
Unlike the other home lending banks which have released their general disclose statements for the March quarter so far, HSBC is still reporting under the old rules under transitional provisions.
HSBC financial controller Craig Bell says his bank doesn't have its accounts audited every quarter and thinks waiting until its audited half-year accounts to the end of the June quarter to provide Basel ll information, such as LVR breakdowns, will provide a greater assurance of accuracy.
Its mortgage book has continued to shrink, in line with the trend since December 2005, to $1.31 billion from $1.35 billion at the end of December 2007.
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