by Jenny Ruth
The local branch and subsidiary, ANZ National Bank, combined saw net profit for the three months ended June plunge 75% to $56 million, the branch's latest general disclosure statement shows.
However, that reflected a $244 million increase in its charges against profit for bad loans in the three months. Net interest income for the quarter was actually up 15.8% to $579 million.
That increase included increasing its charge to meet its obligations in the ING Diversified Yield and ING Regular Income Funds from $116 million at March 31 to $147 million at June 30.
ANZ's profit for the nine months ended June was down 43% to $478m with charges against profit for bad loans totaling $532 million. Only $122 million of these charges related to mortgages while another $102 million related to other retail exposures.
The bank's net interest income for the nine months rose 16.3% to $1.77 billion.
The subsidiary, ANZ National Bank, increased its mortgage book by $281 million in the June quarter but, using Reserve Bank figures as a proxy for the market, its share of new mortgage lending by registered banks amounted to just 15.9%.
That meant its share of the market eased from 28.71% at March 31 to 28.56% at June 30.
ANZ's New Zealand branch's mortgage book stood at $4.52 billion at June 30, down from $4.77 billion three months earlier, suggesting the branch's share of the market fell from 3.03% to 2.84%.
The figures on the branch's mortgage book aren't directly comparable with those of the subsidiary because the branch's numbers are prepared under Basel 1 rules and include business loans secured against housing. The subsidiary's figures are prepared under Basel ll rules and don't include business loans secured against housing.
ANZ established the New Zealand branch in January to get around Australian prudential rules preventing an Australian bank from lending more than 50% of its equity to a subsidiary.
The subsidiary's GDS shows it had a further $5.64 billion in off-balance sheet retail mortgages, generally loans approved but not drawn down. Of the total book, 21.6% had loan-to-value ratios (LVRs) above 80%, down from 22.3% at March 31 and 26.3% at December 31.
Loans with LVRs above 90% eased marginally to 10.2% of the book from 10.5% at March 31.
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