Westpac's New Zealand operations boosted its share of the mortgage market significantly during the December quarter by writing 33% of all new mortgages provided by registered banks.
The bank's mortgage book grew by $1.45 billion to $25.96 billion. Using Reserve Bank of New Zealand figures as a proxy for the market, that boosted its market share to just over 20% from 19.6% at the end of September and 19.4% in December 2005.
Chief executive Ann Sherry says that growth has come through executing the strategy outlined to analysts six months ago to stem customer attrition, to improve the bank's market share in the Auckland market and to meet the market on mortgage rates.
Previously, Westpac had stood back from the mortgage market price war started by Bank of New Zealand in late 2004.
"We've now got net customer growth after 10 years of net customer attrition," Sherry says. "Our share of the Auckland market has kicked back up and we're now writing in Auckland what we're writing across the rest of the country. That's been a big turn around."
Sherry says the market environment has remained as competitive as ever. Many of the new mortgage customers were people who had moved their mortgages from Westpac after the price war erupted. "We know who they are. We saw them go and we've been very keen to get them back," she says.
Meanwhile, The National Australia Bank-owned Bank of New Zealand grew its mortgage book by $540 million in the three months ended December although its managers may not be crying in their beer since its net profit jumped 33.8%.
The bank's net profit rose to $186 million for the three months compared with $139 million in the same three months a year earlier.
BNZ's mortgage book rose to $20.97 billion at the end of December from $20.43 billion at the end of September. That meant its market share slipped to 16.18% from 16.32% using Reserve Bank of New Zealand figures as a proxy for the market.
To put the growth of BNZ's mortgage book in perspective, the central bank's figures show home lending by registered banks grew by $4.4 billion, or 3.5%, in the three months compared with the 0.3% growth in BNZ's book.
BNZ, which refuses to deal with mortgage brokers, started a price war in the mortgage market in late 2004 with its Unbeatable campaign which is still underway. Its market share in December 2004 was 16.29%.
