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ANZ sets record for home loans

ANZ has reported the biggest ever quarterly increase in home loans.

Monday, August 20th 2012, 2:59PM

by Jenny Ruth

ANZ Bank's mortgage book surged by a record $1.09 billion in the June quarter, increasing its market share for a second successive quarter.

Until the last couple of quarters, ANZ's share of the mortgage market has been mostly trending lower since it took over National Bank in 2003, although it remains New Zealand's largest home lending bank by a significant margin.

ANZ's June quarter disclosure statement shows its mortgage book grew $1.09 billion in the three months ending June 30. The previous record quarterly growth for any bank, $880 million, was by Kiwibank in the December 2008

ANZ New Zealand chief executive David Hisco says the growth reflects the build up of work the bank has put in over the past 12 months.

"We've basically pulled apart our home loan process and put it back together again with the whole idea of making it easier for customers and for staff. It seems to be working," Hisco says.

The bank has instituted more than 50 processes, increased training of front-line staff and given more of its front-line people discretion to approve home loans on the spot.

Most of the growth, $571 million, came from mortgages with loan-to-valuation ratios (LVRs) between 80% and 90%, followed closely by $568 million growth in mortgages with LVRs below 80%. Mortgages with LVRs above 90% shrank by $47 million and now account for 8.18% of ANZ's total book, down from 8.44% three months ago.

Hisco says while there are often good reasons to approve loans with LVRs above 90%, "if you do it above 90% by loosening standards, you will only do it for a short while."

ANZ's deposit book (excluding wholesale deposits and debentures) grew by a modest $55 million in the quarter and by $1.62 billion in the year ended June 30.

"This year, we've raised more deposits than we have lent money, so we're in good shape," Hisco says.

Chief financial officer Nick Freeman says the bank's core funding ratio continues to improve.

ANZ's net profit for the three months ended June 30 rose 36.2% to $350 million and was up 31.3% to $965 million in the nine months ended June 30. Charges against for bad loans were up slightly to $48 million in the June quarter.

Comments from our readers

On 20 August 2012 at 4:12 pm Amused said:
ANZ National might be going "guns blazing" at present in terms of new home loans but they are also losing a heck of a lot of their existing mortgage customers to their competitors. David Hisco can say what he wants but their emphasis seems solely focused on "new to bank customers" rather than looking after those already banking with them. Great way to run a business....
On 21 August 2012 at 7:25 am Tom Gould said:
I understand mortgage discharges are at a very low level, so looks like ANZ National are doing exactly what any well run bank should be doing. Pity about the others.
On 21 August 2012 at 8:31 am Agreed said:
Have to agree with Amused. There seems to be no focus on existing customers. Kiwibank is making more effort.
On 21 August 2012 at 11:02 am Amused said:
Given how archaic ANZ systems are Tom I would be surprised if they knew even half of what they are losing. Ask Westpac and ASB how busy they are at present and where the bulk of the business is coming from...
On 22 August 2012 at 11:17 am Tom Gould said:
Your figures don't stack up, Amused. The latest Terralink data shows all banks except ANZ and Kiwibank are getting more sign ons than discharges of mortgages. ASB, in particular, looks like it's bleeding.
On 22 August 2012 at 10:35 pm Amused said:
ASB bleeding? not by a long shot Tom. Most bankers and solicitors I speak to expect a flood of National Bank customers leaving ANZ once the merger there is finalised. What this space....
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