Consumer loans going bad 17 February 2010 5:32PM Ian Rogers Westpac said at its trading update yesterday that its impairment charge for the December 2009 quarter was around $400 million lower than over prior quarters, not that the bank produced any other line items from its profit and loss statement.The bank also said that impairment charges were "below expectations" for the first quarter of its financial year but noted that it expected "some volatility" in impairment charges over the year.Westpac provided a mixed review of trends in asset quality.A slide in the presentation on "stress exposures as a percentage of committed lending" shows a slight decline in this measure in the December quarter, from around three per cent to marginally less than three per cent.New stressed assets, according to the same slide, were "smaller, fewer and spread across industries and geographies". There were, Westpac said, "minimal write-offs in the quarter".The "pillar three" report for the December 2009 quarter shows that impaired loans increased six per cent over the September 2009 quarter to $4.0 billion. Total provisions increased four per cent over the quarter to $4.9 billion. The rise in impairments is concentrated in corporate lending and to a lesser extent in business lending. Impaired loans in corporate lending increased by 25 per cent over three months, though actual losses in the December quarter in corporate lending were only $1 million.Loan losses are becoming concentrated in consumer banking. Of actual credit losses of $203 million at Westpac for the December quarter, $55 million were in credit cards and $33 million in the "other retail" segment.A chunk of the $41 million in credit losses at St George (which Westpac reports under a simpler method, for now) is also likely to be in consumer lending.