Kiwibank mortgage lending surges 60% in September quarter

Kiwibank's new mortgage lending surged 59.9% or NZ$419 million to NZ$5.528 billion in the September quarter from growth of NZ$262 million in the June quarter, according to its General Disclosure Statement. The New Zealand Post-owned bank punched well above its weight in the quarter as it took advantage of its relatively higher proportion of domestic retail funding to offer lower rates than the big four Australian banks, which rely on foreign wholesale borrowing to fund around 40% of their books. This means Kiwibank's share of new mortgage lending rose sharply, given ASB showed growth of NZ$559 million for the quarter and ANZ National grew NZ$153 million. See our updated competitive analysis page here especially for newsletter subscribers. Our analysis shows non-bank mortgage lending fell NZ$100 million to NZ$5.149 billion. Elsewhere, the GDS showed Kiwibank added NZ$460 million of retail deposits and NZ$481.7 million worth of PIE deposits in the September quarter. It's no surprise then that Kiwibank's term deposit rates have been slashed aggressively over the last month as it struggles to lend out all the extra cash coming into its coffers. However, Kiwibank's loans that are past due by 90 days or more have increased sharply. Past due assets rose to NZ$20.6 million from NZ$8.8 million at the beginning of the quarter, including NZ$14.1 million of extra past due loans in the institutional and corporate segment. This was up from net additions to past dues in the same period a year ago of NZ$1.5 million and NZ$4.1 million in the June quarter of 2007. New Zealand Post's payment to Kiwibank for managing its payment services rose to NZ$12.2 million in the quarter from NZ$10.1 million in the same quarter a year ago. Total profit for the September quarter fell to NZ$9.67 million from NZ$11.43 million in the same quarter a year ago, with retail profits almost halving to NZ$4.4 million from NZ$8.1 million in the same quarter a year ago and corporate and institutional profits rising to NZ$9.5 million from NZ$8.7 million. Kiwibank's total tier one capital ratio fell to 7.6% from 8.6% at the end of June, but was up from 7.4% at the same time a year ago, largely because of NZ$50 million of new equity pumped in by New Zealand Post in the June quarter. Kiwibank's total capital ratio rose to 11.4% from 10.8% in the June quarter and 10.5% a year ago, largely because of a NZ$60 million issue of tier 2 subordinated debt during the September quarter. * This article was first published yesterday in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.