Lending losses moderated and credit quality improved for Westpac over the December 20102 quarter, the bank said yesterday.Westpac has dropped quarterly trading updates but still publishes the "pillar 3" risk and capital report mandated by the Australian Prudential Regulation Authority.This shows loan losses of A$256 million for the quarter, down from $271 million in the same quarter in 2011, and losses of $1.6 billion in the full year to September 2012.The level of impaired loans fell to $4.13 billion, from $4.39 billion, over the quarter, with most of the improvement coming in corporate and business lending. Measures of Westpac's loan growth are mixed. Risk-weighted assets fell one per cent to $294 billion. Westpac said this fall was "primarily attributable to lower stressed assets associated with business lending and a reduction in corporate off balance sheet exposures". This was partially offset by growth in consumer lending.The bank's exposure at default fell by a more modest 0.3 per cent over the quarter.Westpac puts its common equity ratio on a Basel 2.5 basis at 8.80 per cent - up 45 basis points - at the end of the December quarter. And the bank put its common equity ratio on a Basel III basis at 8.30 per cent - up 14 bps.