Kiwibank lends more than Aussie owned rivals in June quarter

By Gareth Vaughan

Government owned Kiwibank loaned more money than any of its four Australian owned rivals during the June quarter.

In fact only two – Westpac (up NZ$343 million) and BNZ (up NZ$114 million) - of the big four Australian owned banks grew their total net lending during the quarter, according to the banks latest general disclosure statements.

Kiwibank’s total net loans and advances rose by NZ$347.65 million during the three months to June to NZ$10.418 billion. The bulk of the growth came from housing loans with Kiwibank’s mortgage book rising by about NZ$307 million to NZ$9.6 billion.

The Government last month agreed to provide an uncalled capital facility to Kiwibank’s parent NZ Post valued in the "low hundreds of millions" of dollars to the group to help maintain its AA- credit rating and enable Kiwibank to continue its lending growth. The Government will also continue to refrain from taking dividends from the bank, which will look to raise about NZ$250 million overseas to help fund its lending growth and offset stiff domestic competition for retail deposits.

Meanwhile, Westpac’s total net loans rose to  NZ$49.712 billion at June 30 from NZ$49.369 billion at March 31. Westpac’s housing loans rose by NZ$365 million, and non-housing term loans by just NZ$42 million.

Next was BNZ, which recently relaxed lending criteria to small businesses. Its net lending rose NZ$114 million to NZ$54.76 billion.

TSB’s total loans rose NZ$67.15 million to NZ$2.474 billion.

Heading in the opposite direction ANZ, the country’s biggest bank, saw its net loans fall NZ$52 million to NZ$95.63 billion. ASB’s slipped NZ$55 million to NZ$53.47 billion and SBS Bank’s dipped NZ$8.29 million to NZ$2.451 billion.

The Reserve Bank’s most recent monthly figures show overall lending growth sluggish in the agricultural and household sectors and falling significantly to business. The central bank’s July figures show total lending to businesses down 7.4% year-on-year to NZ$72.2 billion, agriculture lending up 2.3% to NZ$47.68 billion and total household claims up 2.3% to NZ$181 billion. Breaking the household claims down, housing rose 2.6% to NZ$169.2 billion and consumer lending fell 2% to NZ$11.8 billion.

PricewaterhouseCoopers’ third New Zealand Banking Perspectives report, released last week, recorded a “dramatic” 6% drop in business lending during the six months to March. PricewaterhouseCoopers partner Sam Shuttleworth told interest.co.nz he saw no reason in the short-term for falling lending to businesses to turnaround with further deleveraging likely.

However, Westpac chief financial officer Richard Jamieson told interest.co.nz his bank had maintained an “open for business” policy through the recession. Westpac had grown business lending by about NZ$400 million in the year to September compared to an overall industry wide fall in business lending of about NZ$5.5 billion, Jamieson said.

“What we’re seeing is individual customers are in pockets deleveraging, there’s absolutely no doubt,” Jamieson said. “But there are businesses that are still looking to expand coming out of the recession.”

Without providing specific details he said Westpac was seeing an increase in customer numbers and was gaining market share. The bank hadn’t relaxed any lending criteria and was lending at “quite favourable” loan to value ratios.

“So we’re not seeing a weakening of the quality of the book. In fact we’re seeing a strengthening of the quality,” Jamieson added.

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