Fitch warns about high LVR lending
Credit rating agency Fitch has affirmed the AA- ratings of ANZ, ASB BNZ and Westpac.
Monday, March 18th 2013, 2:54PM 
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It said that reflected the high likelihood of support, if required, from their Australian parent banks, the New Zealand Government and Reserve Bank.
It acknowledged the drought could affect farmers’ ability to repay debt, which could hurt profit, and pointed to an increase in high loan-to-value housing lending as an area of concern.
Fitch also says New Zealand banks’ reliance on wholesale funding is high compared to other banks around the world.
It follows Reserve Bank governor Graeme Wheeler’s monetary policy statement last week in which he said he was concerned at the rate of growth of high loan-to-value lending.
In December, New Zealand bank lending surpassed deposit growth on an annualised basis for the first time since early 2009.
The country's big five banks, combined, grew residential mortgages with equity of less than 20% by $3.3 billion during 2012 – or about 10%.
ASB and BNZ have increased high LVR lending since 2008 as a proportion of their overall loan books while ANZ, Kiwibank and Westpac have reduced theirs.
| « ANZ cuts a rate but increases others | Westpac matches ANZ » |
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