ANZ, BNZ lift profits but lose mortgage market share

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New Zealand's largest bank, ANZ National Bank's profit grew strongly during the June quarter although its share of the mortgage market slipped.

Monday, September 1st 2008, 5:31AM

by Jenny Ruth

The bank's latest quarterly disclosure statement (GDS) shows its net profit rose 25.8% to $268 million during the three months, bringing its profit for the nine months ended June to $960 million, up 13.2% on the same period a year earlier.

ANZ's mortgage book grew $400 million to $49.51 billion during the three months. Using Reserve Bank figures as a proxy for the market, its market share fell to 32.55% from 32.72% at the end of March.

The bank had a further $5.64 million in mortgages off-balance sheet at June 30, generally loans approved but not drawn down slightly from $5.84 million at March 31.

ANZ's mortgages with loan-to-value ratios (LVRs) above 90% fell to $6.69 billion, 12.6% of the total mortgage book, from $7.46 billion, or 13.6%, at March 31. In its March GDS, its first under the new Basel ll banking rules, the bank said the valuations it uses for each loan are discounted from registered valuer's assessment. Where it is unable to establish LVRs, ANZ also classes those loans in the above 90% category "to maintain a conservative treatment."

At the other end of the spectrum, $22.1 billion, or 41.6% of the mortgage book had LVRs below 60%.

Bank of New Zealand, which is still reporting under the old Basel l rules, raised its third quarter net profit just 1.7% to $181 million, although profit for the nine months ended June 30 was up 17.5% to $597 million.

Its mortgage book grew $212 million to $25.53 billion, although its market share, again using Reserve Bank figures, eased to 16.78% from 16.86%.

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