ANZ has best quarter in mortgage market since 2007

ANZ Bank grew its mortgage book for the first quarter in a year and increased its share of the mortgage market for the first quarter since probably 2007.

Friday, May 25th 2012, 2:40PM

by Jenny Ruth

ANZ's loan-to-valuation ratio (LVR) table in its latest disclosure statement shows its mortgage book grew by $437 million to $51.46 billion in the three months ended March after shrinking by $148 million in the December quarter and shrinking by $162 million in the September quarter.

Assuming Reserve Bank figures will prove a reasonable proxy for mortgage lending by registered banks as shown in their disclosure statements, that means ANZ accounted for 32.2% of net new lending in the quarter and its market share at the end of the quarter was 30%.

ANZ has only been disclosing this information in its present form since the June quarter of 2011. However, its note on loans and advances, which has a lengthy history but which is a measure not all banks produce, shows the mortgage book grew in the March quarter for the first quarter since March last year.

This and other measures of its mortgage book suggest it has been losing market share since the December quarter of 2007. Its mortgage book was more or less stable through 2007 but had previously been falling since it took over National Bank in 2003, although it remains New Zealand's largest home lending bank by a significant margin.

ANZ has been particularly active in the market recently, including offering $1,000 cash to anybody who takes out a homeloan of more than $100,000, and earlier this month Kerri Thompson, managing director of the retail division, told GoodReturns the bank has been working hard on simplifying its mortgage application process.

Thompson stressed streamlining the process hasn't meant compromising on credit criteria.

Certainly, the disclosure statement shows above 90% LVR lending fell slightly to 8.4% of the total mortgage book at March 31 from 8.5% three months earlier.

However, 68.4% of net new lending, or $299 million, in the latest quarter was on mortgages with LVRs between 80% and 89%. The rest of the net growth, $149 million was at LVRs below 80%.

ANZ's net profit for the three months ended March 31 fell 8.3%, reflecting a drop in other operating income such as fees to $4 million from $28 million in the year-earlier quarter and a rise in charges against profit for bad loans to $57 million from $51 million.

ANZ's net interest income rose 7.2% to $683 million in the three months.

« ASB Bank's mortgage book growths for first in 8 quarters

ANZ's best quarter since 2007 hard work: Thompson »

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