A two-year project to reduce the concentration in commercial property lending at Westpac following the takeover of St George Bank has run its course, with the bank now more open to meeting the new funding needs of property developers and real estate trusts.The takeover of St George lifted the proportion of Westpac's total lending on non-residential property from eight per cent, in May 2008, to 10 per cent at the end of that year.Westpac's board soon gave management a mandate to reduce exposure to commercial property, a decision made at the same time the bank was obliged to take on extensive additional provisions to cover risks in the St George book."Our total commercial property concentration is at about seven per cent of total committed exposures," Phil Coffey, the bank's chief financial officer, told an investor briefing yesterday."So, our [business lending] book is now positioned to grow at a pace consistent with the system."Westpac's business loans fell by around 40 per cent over the year to March 2011, about twice the rate of the decline in business lending overall in Australia.Coffey told the briefing that had the bank "been chasing revenue, we would have held on to those exposures, but we've actually re-tilted the portfolio to reduce risk. "I think there are a lot of things that we've done that demonstrate that we are - and want to be considered - a first-rate risk manager."Westpac reported a slight rise in the ratio of impaired assets to total loans, which at 0.98 per cent was up three basis points over six months and up eight basis points over 12 months.About half of this increase in impaired loans (up around $200 million, to $4.8 billion, over the six months) arises from the weaker credit conditions in New Zealand.