Major bank reports rise in loan delinquencies

by Miklos Bolza08 Nov 2016
The number of Australian 90+ day loan delinquencies at Westpac increased by 21 basis points in the 12 months prior to 30 September 2016.
 
According to the bank’s financial results released yesterday (7 November), the number of mortgages 90 days past due increased from 0.45% to 0.66% in this time.
 
While the bank attributes some of this to changes in the reporting of delinquencies for customers granted hardship assistance, slow economic growth and rising unemployment (especially in mining regions) is also to blame.
 
“This is being offset by continued low stable delinquencies in NSW where economic activity has been robust,” says the financial report.
 
Australian investment mortgage holders at Westpac have bucked this trend with a superior delinquency profile of only 0.48%.
 
In a total loan book of 1.6 million mortgages, the major bank has only 262 houses in possession – equating to 0.02% of its portfolio.
 
The number of Australian mortgages at Westpac has been growing with the loan book increasing by $28.3 billion or 8% from September 2015 to September 2016. New lending volumes increased by 7% in this time.
 
The bank’s financial report attributed this growth to a greater emphasis on more responsible lending.
 
“Following the introduction of regulatory caps on the growth in investor property lending and the introduction of differential pricing, there was some switching of mortgage loans to more appropriately reflect their current purpose. Adjusting for these movements, owner occupied lending grew a little faster than investor property lending.”
 
Related stories:
 
Mortgage arrears at three year high: Moody’s
 
Westpac expects more consumer loans to turn bad in second half
 
Mortgage delinquencies to rise in 2016

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