SBS mortgage book shrinks again

SBS Bank's mortgage book fell by $24.7 million to $1.72 billion in the quarter. Using Reserve Bank figures as proxy for the numbers disclosed in banks' disclosure statements this quarter, that means SBS Bank's share of mortgages written by registered banks fell from 1.02% to 0.99% in the three months.

Most of the shrinkage came from mortgages with loan-to-valuation ratios (LVRs) of 80% or below - they shrank by $58.3 million to $1.31 billion. Mortgages with LVRs of 90% plus also shrank by $9.7 million to $320.7 million in the latest quarter - 88% of these loans were government-backed Welcome Home Loans.

The only category to grow was mortgages with LVRs between 80% and 90% which rose by $43.3 million to $93.4 million.

The decline in SBS's mortgage book could be reversed once the Canterbury rebuilding gathers steam.