Westpac's lending secured by residential mortgages grew $658 million to $29.65 billion during the quarter, but, using Reserve Bank figures for registered banks as a proxy for the market, its market share slipped from 20.3% at the end of September to 20.2% at the end of December. That was still up from 20% in December 2006.

Westpac spokesman Craig Dowling says that while his bank has been "getting many things right, one area we have identified as requiring more attention is how we service the broker channel and we do have some initiatives there that will help going forward."

Dowling says high interest rate payments as a proportion of available household income is inspiring general caution with some people who might otherwise have bought houses leaving their money in term deposits to collect current high interest rates.

People are "holding off extending their mortgages for renovations until they get a better idea of what return they might get on such activity" and that there's anecdotal evidence of property investors downsizing their portfolios.

TSB Bank's net profit for the quarter rose 17% to $31.3 million. Its mortgage book rose from $1.8 billion at the end of September to $1.82 billion at the end of December. That shaved its market share back to 1.24% from 1.26% in September and in December 2006.