The rate rise last month prompted complaints from customers.
Brokers spoken to by Good Returns said they could not understand the reasoning behind the move when home loan rates in general have been flat or falling.
Clare said: “We price our products across the full range of deposits and loans according to a range of criteria. It depends on our appetite for that type of product. At this point, with that product, that rate is right for us.”
He said it was too early to say with any certainty whether the bank’s campaign to woo disillusioned National Bank customers was working.
“A couple of anecdotal indicators seem to point to National Bank shedding a few more customers and we had a higher number of new-to-bank customers in October than last year. We measure switching in and out. National Bank may be slightly overrepresented there.”
Clare said credit growth was muted in New Zealand at present, which was particularly had for banks as it had been strong before the global financial crisis. “Organisations don’t like seeing volumes fall so you end up in vigorous competition.”
He said that was seen both in pricing and in banks widening their risk appetites.
Westpac is now offering more than 95% lending for customers that meet its criteria.
Westpac New Zealand yesterday announced a 22% increase in cash earnings to $707 million for the year ended September 30, 2012.
The bank reported a 10% increase in core earnings driven by a 7% increase in net operating income. This, and a 21% decrease in impairment charges, led to the 22% increase in cash earnings.
Home loan balances increased 3% and business lending increased 4%. Asset quality has improved as both business and consumers focus on lower levels of gearing.
Clare said mobile banking was the next big thing for the bank. It is now tipped to grow faster than internet banking has over the past 10 years.
