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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

Reporting under the new bank disclosure rules, known as Basel ll, the community trust-owned TSB Bank's annual report shows just over 90% of its mortgage book has loan-to-value ratios (LVRs) below 80%.

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.

« The NZ Mortgage Mag – Sink or SwimHome loan report: Slow trickle »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 4.05 4.49
ANZ Special - 3.55 3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.45 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 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank ▼5.20 ▲4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▲3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 3.45 3.89
Sovereign 5.30 ▼3.89 ▼4.05 ▼4.39
Sovereign Special - ▼3.39 ▼3.55 ▼3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.45 3.99
Median 5.34 3.99 4.07 4.39

Last updated: 9 December 2019 9:02am

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