ASB Bank's mortgage book growths for first in 8 quarters

Commonwealth Bank of Australia-owned ASB Bank's mortgage book grew for the first in eight quarters although it continued to lose market share in the March quarter.

Thursday, May 24th 2012, 6:00AM

by Jenny Ruth

The loan-to-valuation ratio (LVR) table in the bank's latest disclosure statement shows its mortgage book grew $67 million to $37.43 billion in the three months ended March.

All the growth came in the part of the portfolio with LVRs below 80% and loans with LVRs above 80%. Loans with LVRs above 90% shrank by $1,065 million and now make up 5.9% of the mortgage book compared with 8.8% three months earlier.

ASB has only been reporting these figures in their current form since its March 2011 statement and this is the first quarter since then to show a shrinking of loans with LVRs above 90% - in the March 2011 quarter, they accounted for 6.2% of the portfolio.

Loans with LVRs below 80% in the latest quarter rose by $902 million and those with LVRs between 80% and 90% rose by $230 million.

If the Reserve Bank figures prove to be a reasonable proxy for the figures disclosed in banks' disclosure statements, that would mean ASB's net new mortgage growth represented only 5.2% of registered banks as a whole, depressing its market share to 21.82% in March from 21.94% in December.

ASB's net profit for the quarter rose 21.2% to $160 million, mostly reflecting a jump in other income, such as fees but excluding trading income and fair value changes, to $93 million from $52 million and a drop in charges against profit for bad loans to $14 million from $36 million in the year-earlier quarter.

Net interest income rose a more modest 3.4% to $332 milion.

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