Westpac pleased by growth in NZ business

Photo / APN

Westpac is reporting a "pleasing" third-quarter uplift in its New Zealand unit.

Lending was up almost 2 per cent in New Zealand dollar terms in the three months to June, compared with the average for the first two quarters, Westpac said yesterday. Mortgage and business lending grew.

For the group overall, lending was up 1 per cent in the third quarter, with the good growth in mortgages in New Zealand and Australia partly offset by some larger institutions paying down debt.

New Zealand mortgage delinquencies fell 8 basis points over the quarter to 72bps at June 8.

"Westpac New Zealand continued to grow its share reflecting its significant investment in staff training and its increased footprint via its new community branches. Margins were also higher," the bank said.

The group reported cash earnings of about A$1.55 billion ($1.96 billion) in the quarter, down 2 per cent on the average for the first two quarters, while core earnings rose 2 per cent. Westpac's Australian shares dropped more than 3 per cent on the result.

"The June quarter 2011 saw the operating environment become more subdued with consumers increasingly cautious and larger businesses continuing to deleverage," said group chief executive Gail Kelly. "This was reflected in slowing system credit growth in the quarter, and weaker markets.

"We have also remained disciplined on expenses supported by the group-wide productivity programme that began last year."

- NZPA, AAP