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Westpac says policy changes focused on quality lending

Westpac says it has been focusing on quality, rather than quantity, of lending over the past year.

Monday, November 7th 2016, 12:09PM

It has reported its profit for the 2016 financial year.

Across the group, its annual profit fell 7%. Within New Zealand, cash earnings dropped 4% to $872 million.

Net interest income rose 2% to $1.7b, driven by a 9% lift in total lending.

More than 90% of lending growth was covered by increased deposits.

Westpac New Zealand Chief Executive Officer, David McLean, said it had been operating in a challenging environment but had returned a solid result.

“Westpac New Zealand delivered a sound performance based on a disciplined approach to risk management and balanced growth,” he said.

“We have focused on quality lending over volume, particularly in housing. This was evidenced by some risk policy changes we were prepared to make and lead the market in implementing policy changes ahead of regulation.”

Westpac was the first to enforce the new Reserve Bank rules on lending to investors and also moved early to shut out buyers relying on foreign income to service their loans.

It also told mortgage advisers last month it would no longer accept any applications for owner-occupier loans when then the deposit was lower than 20%. Banks can lend 10% of their new lending to borrowers with small deposits.

McLean said he expected similar economic conditions through 2017.

The challenges would remain similar, particularly externally, with subdued global demand and the high New Zealand dollar creating challenging conditions.

Reserve Bank rule changes would dampen demand, although the effects could be short-lived, Westpac said in releasing its results.

“Some additional tightening in macro-prudential policies is expected over the coming year in the form of debt-to- income limits on borrowing. With investor activity significantly impacted by new regulations last year, the market is opening up to first and next-home buyers. How any debt-to- income limits might impact first-home buyers in particular will no doubt be carefully considered by the RBNZ.”

Tags: Westpac

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 5.65 5.55 5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society ▼8.60 6.75 6.40 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 5.95 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.49 6.49 6.49
TSB Special 7.89 5.69 5.69 5.69
Unity 7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.10 6.05 5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.02 5.79 5.69

Last updated: 20 November 2024 9:45am

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