Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Westpac sees $17.5bn of mortgages reclassified

westpac  x westpac  x
James Mitchell 5 minute read

Westpac has seen $17.5 billion of investment property loans switched to owner-occupied loans in the first half of 2016 following the introduction of differential pricing.

Announcing its half-yearly results yesterday, the major bank reported that its total mortgage book increased $15 billion or 4 per cent over the period.

Owner-occupied home loans grew 15 per cent to now comprise 54 per cent of the portfolio, while its investment property loans reduced 8 per cent to now comprise 40 per cent.

“Following the introduction of differential pricing between mortgage products, there were $17.5 billion of net switching from investment property loans to owner-occupied during the first half of 2016,” the bank said in a trading update.

Advertisement
Advertisement

Westpac CEO Brian Hartzer said the group had delivered a sound result in a volatile economic environment with significant regulatory change.

“The consumer bank delivered strong home loan and deposit growth and well-managed margins,” Mr Hartzer said, adding that Westpac’s business bank also recorded sound balance sheet growth, particularly in SME, with margins stable over the period.

However, he noted that sector headwinds contributed to a softer performance in other divisions.

“In particular, Westpac Institutional Bank (WIB) was affected by lower net interest margins and significantly higher impairment charges related principally to four large exposures which added $252 million to provisions,” Mr Hartzer said.

In response to regulatory change, Westpac raised around $6 billion in equity over the 2015 calendar year, lifting the group’s common equity Tier 1 ratio to 10.5 per cent, or around 2 percentage points higher than a year earlier.

PROMOTED CONTENT


“These actions have materially strengthened the group’s capital base but have impacted earnings per share and return on equity,” Mr Hartzer said.

“Importantly, on most measures, overall asset quality remains sound, with the level of stressed assets little changed over the half.

“There have been a few pockets of stress, mostly related to lower commodity prices, and an increase in provisions for a small number of larger exposures, which contributed to a rise in impairment charges.”

[Related: Brokers react to Westpac's shock lending decision]

Westpac sees $17.5bn of mortgages reclassified
westpac  x
TheAdviser logo

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.

westpac  x
James Mitchell

James Mitchell

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.

He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.

James holds a BA (Hons) in English Literature and an MA in Journalism.

 

 

more from the adviser
David Hyman Lendi lays out post-merger strategy

Having wrapped its first month post-merger with Aussie, Lendi’s...

website computer Non-major lender updates broker website

A regional lender has updated its broker website with new feature...

Jeff zulman TrailBlazer joins SME Recovery Loan Scheme panel

The non-bank lender has become the 19th member of the government...