NZ big banks maintain lending growth

New Zealand’s five major banks have reported solid lending growth in the fourth quarter of 2014.

An analysis prepared by PwC indicates the total lending growth of ANZ, ASB, BNZ, Kiwibank and Westpac was 1.47 per cent, up from the previous quarter of 1.37 per cent, while total lending increased to NZ$321.2 billion, compared with NZ$316.5 million three months prior.

Mortgage lending growth for the quarter was 1.26 per cent, increasing from 1.11 per cent from the previous period while total mortgage lending rose to $190.5 billion, from $188.1 billion.

Mortgages with an LVR in excess of 80 per cent has continued to decrease, with 15 per cent represented of total mortgage lending in the fourth quarter, compared to 16 per cent in the third quarter.

“Slowly but surely, the quantum of mortgages with a LVR in excess of 80 per cent continues to reduce, improving the underlying position of the banks in respect of mortgage lending,” the report noted.

Corporate lending growth for the quarter was 2.12 per cent, up from 1.90 per cent in the previous quarter, while total corporate lending was NZ$117.5 billion at the end of 2014.

PwC partner and banking and capital markets leader, Sam Shuttleworth, credits this to the “continued positive economic conditions and the general confidence by corporate New Zealand sustained throughout the 2014 calendar year”.

Meanwhile, net profit before tax decreased by 4.4 per cent to $1.59 billion in the fourth quarter, from 1.67 billion earned during the third quarter.

According to the PwC report, the decrease in profit before tax of $73 million is attributable to a decrease in other operating income of $141 million (16.5 per cent) and an increase in impaired asset charges of $19 million (27.1 per cent), offset by an increase in net interest income of $41 million (2.0 per cent) and decrease in operating expenses of $46 million (4.0 per cent).

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