Westpac NZ profit flat in second half 04 November 2014 4:56PM Bernard Hickey Westpac New Zealand's cash profit was flat in the second half of the financial year as higher bad debt charges offset extra net income from faster lending growth than its peers.Westpac NZ reported cash earnings in the second half of NZ$432 million, unchanged from the first half after bad debt charges rose to NZ$22 million, up from NZ$4 million in the first half.Acting chief executive David McLean told Banking Day that debt provisions had bottomed out after a long period of improvement as New Zealand's economy expanded and delinquency rates fell."We think we're at the most benign point in the credit cycle," McLean said.Mortgage lending rose three per cent to NZ$39.6 billion in the second half from the first half, which was 20 per cent faster than system growth. McLean credited this to growth in the number and activity of Westpac's mobile mortgage managers. Their numbers grew to 54 by the end of the second half from 41 a year earlier and the portion of mortgage applications handled by these managers rose to 16 per cent from 11 per cent a year earlier.He said Westpac had chosen not to lower its lending standards in mortgage lending, but had been competitive on price. "We're going to match the market on pricing, but we're trying not to add fuel to the potential price war there," he said.Westpac NZ's agribusiness lending also grew twice as fast as the wider market through the financial year, although its market share was coming from a low base of around 12 per cent relative to its share in other markets of closer to 20 per cent. Agribusiness market leader ANZ has been shedding market share in farm lending in recent years to reduce its over-weighting in the sector, making it easier for rivals such as National Australia Bank's BNZ and Westpac to win share.Deposits grew six per cent for the year to NZ$49.4 billion, funding 90 per cent of lending growth for the year. Net interest margins fell five basis points to 2.27 per cent through the full financial year after a swathe of customers switched from higher margin floating mortgages to lower margin fixed mortgages as the Reserve Bank tightened monetary policy.McLean was confident about the outlook for Westpac NZ, given the economy's continued expansion, driven in part by surging construction in Christchurch and Auckland and robust consumer spending.