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Kiwibank accounted for 25% of all bank mortgage lending in Dec half year

Kiwibank grew its its mortgage book by $1.29 billion in the six months ended December and accounted for nearly a quarter of all mortgage lending by registered banks for the six months, based on Reserve Bank data.

Thursday, February 22nd 2024, 12:38PM

by Jenny Ruth

The government-owned bank's mortgage growth in the six months was also double the $634 million it lent in the same six months a year earlier.

Kiwibank is the fifth-largest New Zealand bank with total assets of $35.39 billion at Dec 31 compared with ASB Bank, the third largest bank, which had total assets of $126.45 billion at that date.

The bank said its total net new lending grew by $1.3 billion and 2.7 times faster than banks as a whole between June and December.

“The improved performance was driven by competitive pricing across key home lending rates and a continued focus on growing out relationship with advisers,” said chief executive Steve Jurkovich.

“This resulted in strong interest for customers looking to switch to Kiwibank and a big increase in the number of first-home buyers choosing Kiwibank to achieve their home ownership goals.”

However, Jurkovich said much of that lending was refinancing rather than funding new house purchases.

But while home lending was strong, lending to business was flat in a market that contracted. “In relative terms, we can be pleased that we have helped more Kiwi businesses than ever,” he said.

Kiwibank reported a $105 million net profit for the six months, up 6.7% on the same six months a year earlier.

Charges against profit for bad debts did rise to $15 million from $12 million in the year-earlier six months, but that reflected a write-back of $4 million on previous charges for home loans and a charge of $19 million against business lending.

Nevertheless, Jurkovich said the number of home loan customers in potential financial stress has risen in the current recessionary environment.

Kiwibank had identified 7,400 customers as showing some signs of financial stress in the six months ended December.

Of those, 526 customers accepted some form of short-term relief from the bank with 426 moving to interest-only payments and another 100 reduced the amount they were paying.

Only 19 customers deferred payment altogether and 66 of them were deemed to be suffering hardship, or just 0.23% of the initial 7,400.

Back in August last year, Jurkovich told an NZX webinar that only 50 customers had been financial stressed enough to have needed intensive help to work through their options.

While the major banks have been reporting shrinking margins, Kiwibank managed to fatten its net interest margin (NIM) in the latest six months to 2.54%, 10 basis points higher than 2.44% in the previous first half.

That was up from 2.06% in the six months ended December 2022.

Jurkovich said Kiwibank had $173 million of retained earnings and $225 million of new capital added in the latest six months.

“That's quite a different amout to be re-lending as opposed to paying an $800 million dividend to your parent,” he said.

That was a reference to ASB Bank, which reported last week and which paid an $800 million dividend to Commonwealth Bank of Australia, even though its net profit in the six months ended December was $749 million, down from $840 million in the previous first half.

Tags: Kiwibank

« ASB has only 370 distressed home loan customersMuch higher OCR not impossible - ANZ »

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.75 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.75 6.65
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 - 7.24 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 7.84 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 - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 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 6.69 6.45 6.19
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 6.75 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 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 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 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 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 7.29 7.32 6.65

Last updated: 8 April 2024 9:21am

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