The bank’s latest GDS seems to show that lending to people with a deposit of less than 20% actually increased in the September quarter, as other banks were winding down their low-deposit lending ahead of the LVR restrictions.

For the September quarter, 22.5% of the bank’s new lending was to people with an LVR of 80% or higher, up from just 3.2% the previous quarter.

The bank says the discrepancy is because it adjusted its June quarter accounts and overall the trend has been for declining high LVR lending. The bank is believed to have reclassified a number of mortgage borrowers, which resulted in them being accounted for in the GDS as new borrowing, when they were in fact existing customers.

At the end of September, the bank had $6.751 billion in loans to people with LVRs of between 80% and 89%, and $3.939 billion in loans to people with equity of less than 10%.
Massey University’s Claire Matthews said the bank’s low-deposit lending had increased slightly compared to the year before. “You would expect them to have started to slow down at this point.”

But she said banks often adjusted their records when they got to the end of the financial year in September. “They do an audit and there can be a reclassification. Things do change. It’s quite normal but I’m not sure how forgiving the Reserve Bank will be in terms of adjustments. The Reserve Bank won’t be happy if in December it’s down to the level they want,  then March, June… then all of a sudden in September it jumps and they have adjustments. Every quarter they will have to be beating their target.”

She said the latest GDS suggested that ANZ would have to “turn off the tap a bit harder” on high-LVR lending. “But it could be just that they got it out of the road and managed to get customers through the doors and finalised before the speed limits kicked in.”