Westpac's profit, mortgage market share shrink
Westpac New Zealand’s December quarter net profit again shrank slightly as charges for bad loans climbed and its share of the mortgage market slipped further.
Tuesday, March 3rd 2009, 5:39AM
by Jenny Ruth
Westpac’s latest general disclosure statement shows net profit for the quarter fell 3.4% to $115 million as impairment charges on loans rose to $91 million from $22 million in the December quarter of 2007.
Of the impairment charges, $21 million were from residential mortgages, $15 million from other consumer loans and $55 million from business loans.
Westpac’s total impairment provisions climbed to $398 million from $234 million at December 31 2007.
Impaired mortgages are still a fraction of Westpac’s total mortgage book of $26.52 billion at December 31. The bank had a further $5.29 billion in mortgages approved but undrawn at that date.
Using Reserve Bank figures as a proxy for the market, Westpac’s share of the mortgage market slipped to 17.03% from 17.27% at September 30.
Mortgages with loan-to-value ratios (LVRs) above 90% at December 31 jumped to $3.24 billion, or 10.2% of the total book, from $2.68 billion, or 8.5% of the total book, at September 30. Loans with LVRs above 80% rose to 28.2% of the book at December 31 from 25% at September 30.
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