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Small banks growth outpace big banks

New Zealand’s smaller banks have grown their lending books at a faster pace then their big four Australian-owned peers in the March quarter.

Wednesday, July 18th 2018, 5:35PM

by Miriam Bell

KPMG’s latest Financial Institutions Performance Survey (FIPS) shows the amount of lending done by banks did grow over the March quarter - but it says that growth was at a slower rate.

In total, the banks did $405,811 of lending in the March quarter, which is up by 1.04% on the $401,652 of lending done in the December quarter.

The total lending was up by 4.08% on the total lending of $389,420 over the comparative period last year.

Of all the banks, it was largely the smaller banks that saw the biggest increases in their loan books.

TSB was the clear front-runner in loan growth in the March quarter, although the FIPs suggests the growth is at the expense of net interest margin.

It saw $5,335 million in loans over the quarter. This was a quarterly increase of 2.95% and a 13.96% year-on-year increase.

Heartland came in second in the lending growth stakes.

It saw $3,909 million in loans, which was a quarterly increase of 2.48% and a year-on-year increase of 12.22%.

One of the major banks, Westpac, actually ranked third when it came to quarterly growth (up 1.79%) but SBS Bank was third in the year-on-year growth stakes (up 11.6%).

However, ANZ continues to hold the biggest portion of the loan market, with a total of $126,834 million in lending over the March quarter.

Meanwhile, a graph in the FIPs on new mortgage lending by borrower type indicates that the percentage going to investors in the March quarter was around 22.5%.

This is much the same as it has been over the last few quarters, although the trend does appears to be rising slightly.

Likewise, the proportion of new lending to investors which is interest-only is sitting at around 33%, again much as it has in recent quarters.

However, both of these current figures indicate the effect of the Reserve Bank’s LVRs on investor lending.

Prior to the introduction of the third round of LVRs in late 2016, the percentage of new mortgage lending going to investors was around 36% while the percentage of interest-only investor lending was around 50%.

The new mortgage lending data is a further illustration of the fact that the banking sector is currently working through quieter times.

Tags: banks KPMG Lending mortgages

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.44 4.69 4.89
ASB Bank Special - 3.95 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.10 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
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 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 4.19 4.69
HSBC Premier LVR > 80% - 3.79 - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.55 4.69 4.99
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 4.29 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 4.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.19 3.95 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - 3.95 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.35 4.49
The Co-operative Bank - Standard 5.75 4.60 4.85 4.99
TSB Bank 5.80 4.45 4.69 4.99
TSB Special - 3.95 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.15 4.29 4.59
Median 5.89 4.50 4.69 4.79

Last updated: 2 December 2018 8:39pm

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