Westpac and BNZ grow mortgage books

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Westpac and Bank of New Zealand produced buoyant profits and strong mortgage book growth in the September quarter.

Thursday, December 15th 2011, 6:29AM

by Jenny Ruth

Together with Kiwibank, they accounted for just about all the growth in mortgage lending in the quarter as four of the mortgage-lending banks, ANZ, ASB, HSBC and SBS, saw their mortgage books shrink.

Now all the banks' disclosure statements have been lodged, mortgage lending, as shown in all the loan-to-valuation ratio (LVR) tables, grew $762 million to $167.05 billion in the three months ended September.

Westpac's statement shows its mortgage book grew $309 million to $34.96 billion while BNZ's shows its book grew $305 million to $27.38 billion. As previously reported, Kiwibank's book grew $318 million to $10.95 billion while ANZ was the biggest loser, its book shrinking $162 million to $51.17 billion.

That put Westpac's share of mortgage lending by registered banks at September 30 at 20.93%, up from 20.84% at June 30, BNZ's at 16.39%, up from 16.28%, and ANZ's at 30.63%, down from 30.87%.

When ANZ took over National Bank in 2003, the two banks' combined share of the mortgage market was about 37.6% (although mortgage figures were reported on a different basis then).

ASB's market share fell to 22.39% from 22.5% during the quarter while Kiwibank's rose to 6.55% from 6.39%.

Westpac's net profit for the three months ended September 30 doubled to $146 million, largely because charges against profit for bad loans fell to $35 million from $100 million in the year-earlier quarter. Net interest income rose 17% to $365 million.

Westpac's profit for the year ended September was up 51.4% to $433 million.

BNZ's net profit jumped to $285 million from $26 million in the September quarter last year while its charges against profits for bad loans sank to $38 million from $52 million.

BNZ's profit for the year ended September rose 11.5% to $671 million.

For both banks, the majority of their charges against profit for bad loans came from business loans, $19 million in BNZ's case and $33 million in Westpac's.

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