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Westpac's mortgage lending slowed in the second half

Westpac New Zealand's mortgage lending slowed in the six months ended September after a much brisker pace in its first half.

Monday, November 6th 2023, 11:39AM

Mortgage lending growth eased to a 3% annual pace from the 5% pace set in the first half with the mortgage book growing to $65.8 billion, up $600 million from the first half when it added $1.4 billion to the book.

Overall lending grew at 3% for the year, down from the 4% pace in the first half.

Westpac's annual net profit fell 18% as its operating expenses and charges for bad debts jumped and as mortgage lending slowed in the second half.

The NZ subsidiary says it has been proactive in supporting customers “in challenging times,” and contacted more than 88,000 customers who were due to roll on to significantly higher fixed home loan rates “to help them understand their options.”

Westpac reported a $963 million net profit for the year ended Sept 30, down from the $1.17 billion result the previous year.

Operating expenses jumped 12% to $1.3 billion while charges for bad debts climbed to $135 million, up from $27 million the previous year. However, the bad debts charge was down from the $154 million recorded in the first half.

The previous year's result included the profit from selling Westpac Life and, excluding that, this year's result was down 7%.

Extra Care expanded

Chief executive Catherine McGrath says her bank contacted more than 9,000 mortgage customers “who we've identified as most at risk of financial stress and we've expanded our Extra Care team to provide more proactive support.”

However, “hardship levels remain low and the number of homeowners behind on repayments has reduced over the past six months,” McGrath says.

Westpac's Australian parent's slides showed stressed loans rose to 1.49% of the total loan portfolio at Sept 30 from 1.33% at March 31 and 0.97% at Sept 30 last year while mortgage deliquencies above more than 90 days rose to 0.33% from 0.22% a year earlier.

The bank said it helped 5,565 Kiwis into their first home, a 7% increase on the previous year.

Those mortgages paying interest only fell to 16.5% of the book from 17.9% while high loan-to-valuation rose – the Reserve Bank eased LVR restrictions from June 1, allowing banks to lend up to 15% of new lending to owner-occupiers with deposits of less than 80%, up from 10% previously – about three-quarters of high LVR lending nationally is to first-home buyers.

Westpac's lending to those with less than a 10% deposit rose to 2.9% of new lending from 2.3% the previous year while lending to those with deposits of more than 10% but less than 20% rose to 9% from 8.6%.

The parent's slides showed brokers accounted for 51.9% of the mortgage book at Sept 30, up from 50.1% a year earlier. Its lending on investment property fell to 25.9% of the book from 26.7% a year earlier.

Tags: Westpac

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 ▼6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 ▼6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - ▼7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 ▼7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼6.79 - -
Co-operative Bank - Owner Occ 8.40 ▼6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 ▼7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 ▼7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - ▼6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 ▼7.74 7.29 6.59
SBS Bank Special - ▼7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 ▼6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.21 7.29 6.65

Last updated: 17 May 2024 9:41am

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