Kiwibank's profit surged and mortgage book growth accelerated in Sept

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The government-owned Kiwibank's profit surged and growth in its mortgage book accelerated in the September quarter.

Friday, November 25th 2011, 10:44AM

by Jenny Ruth

Kiwibank, which doesn't want to comment on a quarterly result, reported a $17.6 million net profit for the three months ended September, more than double the $8.7 million in reported for the September quarter last year.

The latest quarter's profit compares with the Christchurch quake-hit $21.2 million net profit the bank reported for the year ended June.

Kiwibank's latest disclosure document shows net interest income rose 38.1% to $59.9 million in the September quarter while charges against profit for bad loans fell to $7.9 million from $9.5 million.

The document's loan-to-valuation ratio (LVR) table, the measure GoodReturns now uses because all the banks are now reporting it on the same basis, shows Kiwibank's mortgage book grew $318 million in the September quarter to $10.95 billion, up from the $305.4 million growth in the June quarter, $245 million in the March quarter and $194 million in the December quarter last year.

Using Reserve Bank figures as a proxy for the market, mortgage lending by registered banks grew by $577 million to $168.98 billion in the June quarter.

If the central bank's figures match those disclosed in all the banks' disclosure documents - Kiwibank is the third bank to have lodged its September document so far - that would put Kiwibank's market share at 6.5% and it would have accounted for 55.1% of new mortgage lending in the three months.

The LVR table shows 81.4% of Kiwibank's book had LVRs below 80% while 4.3%, or $465.4 million, had LVRs above 90% and $403 million of those loans were government-backed Welcome Home Loans.

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