Mortgage delinquencies still to peak

Westpac reported growth of 13 per cent, to $133 billion, in the mortgage book in the year to March 2008, and (thanks to the credit crunch) at a level in excess of "system" credit.

Chief financial officer Phil Coffey said that mortgage delinquencies are moving higher, and they probably have further to go.

"When we look at our portfolio, on a state by state basis, there is no doubt that New South Wales is the state where delinquencies have moved higher."

Westpac mortgages past 90 days have increased to 0.35 per cent, four points higher than six months ago and six points higher than a year before.

Gail Kelly, CEO, said she expects residential system growth to continue slowing, with the March 2008 Reserve Bank system aggregate falling this week to 11.2 per cent.

"We think growth is slowing in the Australian economy. Growth in the housing sector has, in recent years, come back from high teens to about the 13 per cent level, and in effect that will come back to the nine or ten per cent level, maybe even eight to ten per cent."

In New Zealand, Westpac's residential lending increased ten per cent to $26.4 billion, with overseas mortgage lending up 16 per cent to $777 million.

The bank reported flat growth in overdrafts and credit card outstandings in Australia, with balances of $3 billion and $7.4 billion respectively.

On the liability side total deposits in Australia increased 25 per cent for the year to $169 billion, with at-call increasing eight per cent to $83.5 billion, term deposits by 28 per cent to $31.6 billion and certificate of deposits up 70 per cent to $50 billion.

In New Zealand deposits increased ten per cent to $31 billion with total overseas deposits up 40 per cent to $20.5 billion.