Kiwibank's GDS for the March quarter was its first under the new Basel ll rules.
Kiwibank is still in the process of classifying all its home loans under the new rules and all those not yet classified were included in those with loan-to-value ratios (LVRs) above 90%, Knowles says.
All Kiwibank's loans above 80% LVRs are fully insured by third parties and some of the loans included in its less than 80% LVRs category are actually 100% loans because of that insurance, he says.
"It's not a traditional LVR classification."
Kiwibank's GDS for the March quarter showed 17.5% of its mortgage lending was on LVRs above 90%. The bulk of Kiwibank's $4.85 billion mortgage book, $3.7 billion, or 76.6%, was on LVRs below 80%.
Most of Kiwibank's loans which are actually above 90% LVRs are part of the government's Welcome Home scheme and therefore fully guaranteed by the government, Knowles says.
Kiwibank's GDS didn't show how much lending it had done under the Welcome Home scheme. The other New Zealand-owned home-lending bank, TSB Bank, showed in its GDS it had lent nearly $43 million in Welcome Home Loans out of its total $1.83 billion mortgage book.
Knowles says Kiwibank's next GDS will include greater explanations of what its figures mean. The bank is finding the transition to the new rules difficult. "I think banks generally are very, very challenged as financial management organisations at present," he says.
