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Mortgages

Mortgage Rates Daily Commentary
Thursday 23 September 2021  Add your comment
Co-op rate increases; Smaller hikes to follow next month; Full licensing latest

The Co-operative is the latest bank to increase pricing on six month to five year terms today. Its one year special goes to 2.85%, level with ASB and Westpac.

Banks are poised to raise interest rates further next month despite a recent wave of increases in recent weeks: [READ ON]

Slow progress so far on the journey towards full licensing. Here's what the FMA said after approving 80 FAP licenses: [READ ON]

 

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Kiwibank grabs market share as Aussie banks shut shop

Kiwibank was the most active mortgage lender in the December quarter by a country mile while the major Australian-owned banks pulled down the shutters.

Friday, April 3rd 2009, 11:05AM

by Jenny Ruth

But the figures suggest Kiwibank can’t continue lending at such a rate unless the government gives it more capital. All of which suggests mortgages are going to me much harder to come by.

With all the banks having lodged their general disclosure statements (GDSs) for the quarter, the figures show Kiwibank accounted for a staggering 89.7% of new lending in the quarter, excluding the newly registered SBS Bank’s $1.63 billion mortgage book.

Without SBS, mortgage lending by registered banks rose $0.97 billion in the quarter and Kiwibank accounted for $0.87 billion of that. That was more than double its $0.42 billion mortgage lending in the September quarter.

That’s despite Kiwibank’s market share being just 4.32% at December 31, up from 3.8% three months earlier.

When Kiwibank reported its results in February, chief executive Sam Knowles said it had taken "a very aggressive position" during the quarter.

Three of the big four Australian-owned banks increased their mortgage books only slightly – the largest, ANZ National Bank’s mortgage book grew just $0.05 billion, Commonwealth Bank of Australia-owned ASB Bank’s rose just $0.03 billion and Westpac’s $0.06 billion while National Australia Bank-owned Bank of New Zealand’s fell $0.02 billion.

Community owned TSB Bank, whose market share was just 1.26% at the end of December, increased its mortgage book by $0.03 billion while HSBC bank continued to run down its mortgage book. SBS’s mortgage book fell $0.01 billion in the quarter.

"If you look at the economic climate, which banks would you think were following the more sensible policy?" asks David Tripe, head of Massey University’s centre for banking studies.

"Is it sensible for a government-owned entity to be taking risks which the privately-owned banks aren’t willing to?"

Nevertheless, Tripe says Kiwibank’s mortgage book probably isn’t particularly risky.

Kiwibanks’s GDS shows the proportion of its mortgages with loan-to-value ratios (LVRs) above 80% fell to 16.8% of its total book at December 31 from 17.5% at September 30 and from 17.7% at June 30. At least some of those high LVR loans will be government-guaranteed Welcome Home Loans, although the bank doesn’t provide a breakdown. Like the other banks, Kiwibank’s asset quality is under pressure although impaired loans remain a very small part of its total assets.

Tripe says Kiwibank’s aggressive lending, coupled with the impact on its balance sheet of marking-to-market its swap book in a falling interest rate environment, means it’s likely Kiwibank will become capital constrained. "To continue being so aggressive, they would need more capital."

Kiwibank’s capital adequacy ratio, its capital as a percentage of risk-weighted assets, fell from 11.7% at September 30 to 10.4% -- under the former Basle I banking rules, banks had to have a minimum 8% capital adequacy ratio. A large part of that deterioration occurred because Kiwibank’s liabilities from derivative financial instruments jumped to $321.3 million at December 31 from $109.7 million at September 30

Given interest rate falls since December 31, "one can realistically expect that to be a much bigger number at the end of March," Tripe says.

« HSBC's profit jumps despite bad loans ballooningFigures show baby boomers after property bargains »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 ▲2.85 ▲3.25 3.55
ANZ 4.44 ▲3.20 ▲3.59 ▲4.00
ANZ Blueprint to Build 1.68 - - -
ANZ Special - ▲2.60 ▲2.99 ▲3.40
ASB Back My Build 1.79 - - -
ASB Bank 4.45 ▲2.85 ▲3.25 3.55
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▲2.85 ▲3.25 ▲3.55
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 ▲3.45 ▲3.85 ▲4.15
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.35 2.75 3.05
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 ▲3.80 ▲4.00 4.34
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 ▲2.95 ▲3.15 3.49
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.99 3.39 3.59
SBS Bank Special - 2.49 2.89 3.09
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲2.65 - -
The Co-operative Bank - Owner Occ 4.40 ▲2.85 ▲3.25 ▲3.49
The Co-operative Bank - Standard 4.40 ▲3.35 ▲3.75 ▲3.99
TSB Bank 5.34 3.35 3.75 4.05
TSB Special 4.54 2.55 2.95 3.25
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 ▲3.45 ▲3.85 4.09
Westpac - Offset 4.59 - - -
Westpac Special - ▲2.85 ▲3.25 3.49
Median 4.54 2.95 3.25 3.49

Last updated: 23 September 2021 8:11am

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