Housing hot for Westpac

By PAULA OLIVER

Westpac's attack on Auckland's red-hot mortgage market appears to be paying off, with the bank yesterday posting a big profit gain and claiming it had significantly boosted its market share in the City of Sails.

Chief executive Ann Sherry announced a net profit after tax of $309 million for the half-year to March 31 - an increase of 34 per cent.

Strong nationwide growth in housing lending was the main reason given for the gain, but Sherry said she was particularly pleased with the early results of Westpac's aggressive drive into the Auckland market.



Traditionally Westpac has lagged behind the ASB and the National Bank in Auckland.

However, Sherry said yesterday that Westpac had lifted its market share of residential mortgage growth in Auckland from 12 per cent to 21 per cent in the March quarter.

"It's a very big jump in a relatively short amount of time," she said.

"In the future we probably won't see such a dramatic lift. But what this says is that great things are possible."

Nationally, Westpac's share of the net growth of the housing market was 20 per cent.

Sherry said the bank had not targeted any one competitor in Auckland and its own evidence suggested the boost had come at the expense of several other banks, rather than one.

She conceded that as Westpac was one of New Zealand's big five banks its market share should be sitting at around 20 per cent.

"Yes, it should. That's what we've got to. But I think we can do better than that."

Westpac is planning to continue its push by opening new branches in Auckland.

Refurbishments were being carried out and the bank had rebranded and updated its technology. Staff would get new uniforms shortly.

But Sherry warned that she did not expect her competitors to lie down.

An ASB spokesman agreed, saying yesterday that the bank was happy with its own rate of growth.

Westpac's local result showed that the bank grew nationally and across all of its business segments.

Its net interest income increased by 23 per cent to $512 million with gains in loan and deposit volumes, more equity and higher margins.

Business banking had a strong result and Westpac's share of the small business market had increased to 23 per cent.

Sherry said that with a competitive banking market and an economy tipped to slow, Westpac was trying to be nimble and look for areas to grow.

Customer satisfaction was another area she would target.

pf* A quarterly banking study released by Massey University's David Tripe yesterday showed that at the end of last year the National Bank held the biggest share of the country's residential mortgage market with 23.1 per cent.

Westpac was second with 20.8 per cent, ASB third with 20 per cent.

The BNZ came in fourth with 15.4 per cent and the ANZ came in last of the big five, slipping to 15.2 per cent.

Half-year highlights

Westpac said it had increased its share of mortgage market growth in Auckland from 12 per cent to 21 per cent.

Net profit was $309 million for the six months to March 31, up 34 per cent on the previous first half.

Net interest income was up 23 per cent to $512 million.

Westpac's share of the national mortgage market's growth was 20 per cent.

It will open new branches in Auckland.