Non-performing housing loans rose again quite sharply in the last month after seemingly stabilising for several months.
In addition, there was another reasonably substantial rise in overall non-performing loans across the whole banking system.
Latest Reserve Bank loans by asset quality figures for October show that non-performing housing loans rose by $71 million (5.3%) to $1.414 billion.
That's the biggest monthly increase since May.
These figures are coming off a very low base. But nevertheless, year-on-year the non-performing housing loans are up by $606 million - or 75.1%.
It means for housing loans the non-performing loan ratio remains around 0.4% of the total.
Across the whole banking system, total non-performing loans rose by $237 million (7.6%), to $3.342 billion. That took the non-performing loan (NPL) ratio up to 0.60%.
By some means of comparison, in the post GFC period, the non-performing housing loans ratio hit 1.2%, while the total system non-performing loan ratio hit 2.2%.
So, while stressed loans are going up, they are rising from a low base.
In its summary of some of the highlights of the data, the RBNZ said non-performing commercial property loans rose $37 million (15.6%), which pushed its NPL ratio up further from 0.55% to 0.63%. The NPL ratio is up 41 basis points for the year.
Non-performing SME loans increased by $73 million (13.4%). This reverses September’s decline, bringing the value to $622 million, compared to $565 million in August.
Agriculture non-performing loans rose by $82 million (9%), which pushed the agriculture NPL ratio up a further 14 bps to 1.62%. This change was driven by a $125 million increase in impaired loans, while loans 90+ days past due fell $44 million.
In other data released by the RBNZ on Thursday, sector lending figures including both banks and non-bank lenders, showed housing lending stock increased by $1.044 billion (0.3%) in October 2023, with the total mortgage stock rising to $353.611 billion.
The monthly increase, modest as it was, was actually the second largest monthly increase reported this year. The annual growth rate, however, remained at 3.0% for the fourth month in a row. And you have to go back to October 2012 to find a slower rate of annual growth
Here are some of the other sector lending highlights as outlined by the RBNZ:
Personal consumer lending stock increased by $57 million (0.4%), which was down on the $103 million increase reported in September 2023. October’s lending stock growth was mainly driven by banks. The annual growth rate declined from 4.8% to 4.3%, but still remains highest among other lending sectors.
Business lending stock jumped by $1.6 billion (1.2%). The annual growth rate rose from 0.9% to 1.6%. That's actually the first time the annual rate has increased in a month since November 2022.
Agriculture lending stock decreased by $275 million (-0.4%) in October 2023. The annual growth rate dipped further from 1.4% to 1.0%.
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