ASB, the only big bank whose residential mortgage book contracted in the June quarter, grows by NZ$318 mln in September quarter

ASB, the only one of the big five banks to see its residential mortgage book shrink in the June quarter, returned to growth in the September quarter.

The bank's General Disclosure Statement (GDS) for the three months to September 30 shows ASB's home loans, based on its loan-to-valuation ratio (LVR) disclosure, up NZ$318 million to NZ$37.709 billion.* The only other major bank to issue a GDS covering the September quarter so far is Westpac, which grew its residential mortgages by just NZ$90 million.

Reserve Bank sector credit data shows overall housing loans grew NZ$1.515 billion, or about 0.86%, in the September quarter to NZ$175.527 billion.

In the June quarter ASB's residential mortgage book shrank by NZ$39 million as all the other major banks, led by ANZ's NZ$1.09 billion growth, grew theirs.

ASB CEO Barbara Chapman told in August that after 6% growth in business lending and 5% growth in rural lending in the year to June 2012, she wanted to grow ASB's home loan book in the year to June 2013. Meanwhile, mortgage brokers said that from being prepared to lend 70% of the money required for an apartment purchase, or even just 50% in the case of some smaller apartments, ASB would now go to 90%, something the bank hasn't denied.

The bulk of ASB's September quarter mortgage growth came on loans where borrowers had deposits of 10% to 20%, with ASB's loans in the 80.1% to 90% LVR category rising NZ$306 million to NZ$NZ$4.8 billion. Loans with LVRs over 90%, meaning borrowers have a deposit of less than 10%, fell NZ$44 million to NZ$2.43 billion.

Meanwhile, the GDS also shows ASB posted NZ$177 million net profit after tax for the September quarter, the first quarter of its financial year, identical to its profit in the same quarter last year.

*This is an on-balance sheet figure and excludes NZ$5.5 billion worth of undrawn commitments and other off-balance sheet exposures.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.