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Kiwibank back in low-deposit business

Kiwibank is seeing strong levels of first-home buyer activity despite restrictions limiting lending to borrowers with small deposits, its chief executive says.

Monday, February 23rd 2015, 12:51PM

by Susan Edmunds

The bank today announced an after-tax profit of $71 million for the six months ended December 31, a 36% increase on the same period in 2013.

The bank has 6.6% market share in home loans with 58,000 customers.

In the six months, lending increased 2.9% from $14.63 billion to $15.05 billion, including home loans, business banking and credit cards.

Chief executive Paul Brock said buyers had seemed to hold off around the time of last year’s election but there had since been a significant increase in activity in the property market over recent months.

Kiwibank was experiencing growth in the number of customers who have an account with the bank bringing their home loan business across and there was also a significant amount of first-home buyer activity, particularly among the bank’s existing customers, he said.

The Reserve Bank limits lending to those with deposit of less than 20% to no more than 10% of new loans.

Kiwibank last year put the brakes on low-deposit lending as it came close to breaching that limit.

But Brock said the Reserve Bank limit had never been breached. He said the bank ran its own, lower limits. “We’re well within those limits. We’ve had challenges from time to time … that’s what you saw late last year when we were cautious for a couple of months. But we’re back in that business now.”

He expects lending growth to continue at a moderate pace in a highly-competitive market.

Spokesman Bruce Thompson said the bank did not have any plans to offer a longer-term fixed rates, such as TSB’s new 10-year offer.

The bank’s investment in digital services was paying off – 55% of all home loan fixes are now done via online and mobile channels and 9% of investment sales are online. The Homehunter app launched last year is now responsible for 10% of all approvals.

New Zealand Home Loans signed up $0.7 billion in home lending in the six months to December 31.

KiwiSaver funds were combined into the Kiwi Wealth KiwiSaver Scheme and at December 31 had $1.97 billion in investments and 127,000 members. Kiwi Wealth’s FUM grew to over $3.16 billion.

Brock said a lot of the KiwiSaver growth was due to members switching from other providers.

« Rates slashed as mortgage wars heat upClaim banks' rules relaxed »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.69 4.35 4.35 4.55
ANZ Special - 3.85 3.85 4.05
ASB Bank 5.70 4.29 4.35 4.55
ASB Bank Special - 3.89 3.85 4.05
BNZ - Classic - 3.85 3.85 4.05
BNZ - Mortgage One 6.40 - - -
BNZ - Rapid Repay 5.85 - - -
BNZ - Std, FlyBuys 5.80 4.69 4.59 4.79
BNZ - TotalMoney 5.80 - - -
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.60 4.75 -
Housing NZ Corp 5.80 4.69 4.49 4.45
HSBC Premier 5.89 3.79 3.79 3.89
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.65 3.85 3.95 3.89
Kiwibank 5.80 4.60 ▼4.60 ▼4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.65 - - -
Kiwibank Special - 3.85 ▼3.85 ▼3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 4.89 4.99 -
Resimac 5.30 4.86 4.14 4.19
RESIMAC Special - - - -
SBS Bank 5.79 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 3.85 3.85 3.99
Sovereign 5.80 4.29 4.35 4.55
Sovereign Special - 3.89 3.85 4.05
The Co-operative Bank - Owner Occ 5.65 3.89 3.89 4.05
The Co-operative Bank - Standard 5.65 4.39 4.39 4.55
TSB Bank 5.69 4.45 4.35 4.55
TSB Special - 3.95 3.85 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.79 4.69 4.79 5.19
Westpac - Offset 5.79 - - -
Westpac Special - 3.85 3.85 4.05
Median 5.80 4.35 4.35 4.19

Last updated: 15 July 2019 9:47am

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