By Gareth Vaughan
BNZ grew residential mortgage lending by NZ$455 million in the March quarter with 35% of its growth coming through loans where the borrower has a deposit, or equity in the property, worth less than 20% of the loan.
BNZ's General Disclosure Statement (GDS) for the six months to March 31 shows home loans up by NZ$455 million, or about 1.6%, in the three months to March 31 to NZ$28.959 billion. Of the growth NZ$161 came from high loan-to-value ratio (LVR) lending, loans where the borrower has less than 20% equity.
ASB and Westpac, the other of the big banks to have issued a GDS for the March quarter so far, recorded residential mortgage growth of NZ$791 million and NZ$571 million, respectively. Of ASB's, 71% came from loans with LVRs of less than 20%. In contrast, 92% of Westpac's growth came from loans where the borrower had a deposit, or equity, of at least 20%.
The percentage of BNZ's residential mortgage book, by value, that's at high LVRs rose to 14.75%. However, that's still the lowest of the major banks. Both ANZ and Westpac are at about 24%, ASB at 22%, and Kiwibank at 19%.
The Reserve Bank recently moved to make the big four banks hold an average of 12% more capital against their housing loans to cover any potential losses from high LVR lending, which adds up to about NZ$500 million between them, or the equivalent of NZ$125 million each. The central bank and prudential regulator said about 30% of all new residential mortgage lending was at LVRs over 80%, up from about 25% in late 2011 and early 2012.
Separately, BNZ paid parent National Australia Bank an ordinary dividend worth NZ$110 million in the six months to March 31, equivalent to 37% of its profit after tax of NZ$298 million. It paid no ordinary dividend in the same period of last year when its net profit was NZ$352 million, and one of just NZ$25 million in the whole of its financial year to September 30 last year.
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