March a bumper quarter for mortgage lending; quake hits SBS's book

The March quarter was a bumper one for mortgage lending with total lending by all banks jumping to $1.39 billion compared with just $0.32 billion in the December quarter and $0.8 billion in the September quarter last year.

Wednesday, June 27th 2012, 1:23PM

by Jenny Ruth

That's slightly higher than the $1.28 billion banking system growth shown in the Reserve Bank's figures for the March quarter.

With all the banks' disclosure statements now in, the clear winners in the quarter were the government's Kiwibank, which lifted its share of the mortgage market to 6.73% at March 31 from 6.65% three months earlier and 6.35% at June 30 last year, and Westpac, which lifted its share to 20.89% at March 31 from 20.78% three months earlier

ANZ Bank also lifted its market share for the first in many quarters, to 30.3% from 30.29% at December 31 but that was still well down from 30.68% at June 30 last year. (Comparable earlier figures aren't available since all banks only started reporting their data in its current form from the June quarter last year.)

While ASB Bank grew its mortgage book for the first in eight quarters, its market share still eased again to 22.04% at March 31 from 22.18% three months earlier and 22.36% at June 30 last year.

Invercargill-based community-owned SBS Bank is the last to report this quarter and its mortgage book shrank for a fifth successive quarter because of the impact of the Christchurch earthquake.

Its book fell by $17.2 milion overall in the three months with loans with loan-to-valuation ratios (LVRs) above 90% being the only part of the book to grow, up $4.5 million to $330.4 million or 18.9% of the total book compared with 18.5% three months earlier. Of SBS's mortgages with LVRs above 90%, 80% are government-backed Welcome Home Loans.

Mortgages with LVRs below 80% shrank by $18.8 million to $1.36 billion.

That meant SBS's share of the mortgage market eased to 1.02% from 1.04% at December 31 and 1.08% at June 30 last year.

SBS finance general manager Tim Loan says 25% of his bank's business was in Christchurch. While everytime another sizeable quake strikes it further delays the rebuild, Loan says he hopes to see an uplift in the current year building up into the 2013/14 financial year.

Showing the extent to which insurance payouts from the Christchurch quake have built up pending the rebuilding, SBS's funds with financial institutions jumped by $42.2 million to $91 million in the year ended March and its investment securities rose by $145.5 million to $265.7 million.

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