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ANZ records biggest rise in mortgages in September quarter since June 2008 quarter

ANZ records biggest rise in mortgages in September quarter since June 2008 quarter

ANZ wrote more home loan business in the September quarter than in any quarter since June 2008 and grew term deposits, a key source of bank retail funding under new Reserve Bank regulations, by 5%.

ANZ’s New Zealand Branch General Disclosure Statement (GDS) for the September quarter shows housing term loans rose by NZ$317 million in the three months to September 30 to NZ$53.89 billion. That's the bank's biggest increase since a NZ$497 million gain in the June 2008 quarter.

ANZ, which also owns the National Bank, has been among banks trying to entice home buyers into the market and incentivising mortgage brokers to bring them business in recent weeks.

For new residential loans ANZ and National are offering to pay up to NZ$1,000 towards customers’ legal costs and waive the application fee for mortgage applications received and approved between October 3 and November 30 and settled by December 31. ANZ and National are also offering mortgage brokers an extra 0.10% bonus commission for applications received and approved between October 3 and November 30 and settled by year’s end. They say new residential lending must top NZ$50,000 in value for borrowers to be eligible.

ANZ's September GDS, just the second released for the September quarter after ASB's, comes with the latest weekly mortgage approvals figures from the Reserve Bank, showing a flicker of life.

Mortgages approved in the week ended November 19 reached 5,400 valued at NZ$705.6 million. By both volume and value, it's the highest level of approvals since the week ending July 30. However, based on a comparison of the most recent 13 weeks of data compared to the same 13 weeks last year, the volume of approvals is down 23.5% and value is down 26%.

In the September quarter ANZ also grew gross loans by NZ$324 million to NZ$97.3 billion and non-housing term loans by NZ$84 million to NZ$39.17 billion.

Meanwhile, ANZ's term deposits rose NZ$1.63 billion, or 5%, in the September quarter to NZ$34.687 billion, up from NZ$33.049 billion at June 30. Total deposits, including finance company UDC’s debentures, rose by NZ$1.4 billion to NZ$62.9 billion.

Retail deposit funding has grown in importance for the banks this year with the Reserve Bank introducing a core funding ratio (CFR) on April 1. The CFR sets out that banks must source at least 65% of their funding from retail deposits and wholesale funding sources with durations of at least one year. The central bank wants to increase the CFR to 75% by about the middle of 2012 to offset New Zealand banks previous reliance on international wholesale, or 'hot' money, markets.

New Zealand banks currently source about 40% of their funding from wholesale sources, with about two-thirds of this sourced overseas. It’s the first time since the December quarter last year that ANZ, which owns both the ANZ and National banks, has grown term deposits.

Last week ANZ New Zealand CEO David Hisco said the ANZ Group could shuffle money from its burgeoning Asian deposit base to New Zealand to bolster its local retail funding base if required. 

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