Housing lending down, business lending up as a percentage of total bank lending as net interest margins rise, latest KPMG FIPS quarterly shows
By Gareth Vaughan
Housing loans as a percentage of New Zealand banks' total lending fell in the June quarter, albeit only slightly.
KPMG's June quarter Financial Institutions Performance Survey (FIPS) shows housing comprised 64.60% of NZ banks' total lending at the end of June, down from 64.71% at the end of March.
The drop bucks the trend over the Covid-19 period, during which housing has surged as a percentage of total bank lending. At the end of September 2019, housing loans comprised 59.33% of total bank lending. (Interest.co.nz also spoke to ANZ NZ CEO Antonia Watson about the rise of housing loans as a percentage of ANZ's total lending here).
Business lending increased as a percentage of total bank lending during the June quarter, taking it back to levels not reached since 2020. Business lending comprised 20.10% of total bank lending at June 30, up from 20.05% at March 31.
Reserve Bank sector credit data shows total housing lending up $3.721 billion, or 1.1%, to $339.412 billion during the June quarter, with business lending up $2.81 billion, or 2.2%, to $128.535 billion. Personal, consumer lending fell $147 million, or 1%, to $13.306 billion.
Meanwhile, the FIPS shows combined net profit after tax across the banks of $1.73 billion in the June quarter, only just lower than the record high $1.74 billion recorded in the March quarter. KPMG notes the highest net interest margins in three years as a "highlight," with net interest income across the banks up 7.6%.
"The net interest margins of the big five banks were each the highest that they have been since at least June 2019 with increases of approximately 10 to 30 basis points between March 2022 and June 2022 alone. This may be due to more borrowers rolling off their historically low fixed interest rates and onto longer term higher interest rates which have priced in future increases in the OCR," KPMG says.
This story was originally published on Interest.co.nz and has been republished here with permission.
