TSB Bank lifts profits, mortgage book little changed in September Qtr

Community trust-owned TSB Bank’s profit jumped 15% in the September quarter while its mortgage book was little changed.

Monday, January 5th 2009, 11:15AM

by Jenny Ruth

The bank’s net profit rose to $12.6 million for the three months ended September from $10.6 million in the same three months a year earlier bringing its profit for the six months to $24.4 million, up 13.5%.

TSB’s mortgage book grew just $11.2 million to $1.83 billion in the three months. Mortgages with loan-to-value ratios (LVRs) above 80% grew to 7% of its total book from 6.5% three months earlier while its past due mortgages nearly doubled to $4.2 million from $2.2 million.

With all the banks’ general disclosure statements (GDSs) for the September quarter now published, an apparent sharp drop in National Australia Bank-owned Bank of New Zealand’s mortgage book artificially boosted the market shares of the other banks.

The GDSs also show a big difference between the total of the banks’ mortgage books, $145.29 billion at September 30, and Reserve Bank figures which put the total lending by registered banks on housing at $153.27 billion at September 30.

BNZ’s apparently shrinking mortgage book reflects it reporting under the new Basel ll rules for the first time and re-classifying some loans under other categories. Its mortgage market share dropped from 17.56% at June 30 under the Basel 1 rules to 16.65% at September 30 under the Basel ll rules.

Reflecting the artificial boost provided by BNZ’s drop, TSB’s market share rose from 1.24% in June to 1.25% in September.

The major mortgage market share winners in the September quarter were the Commonwealth Bank of Australia-owned ASB Bank, at 25.05% from 24.63% at June 30, and the government-owned Kiwibank, at 3.8% from 3.51% at June 30.

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