ASB Bank grew its mortgage book aggressively in the March quarter and most of its new lending was in the high-risk area currently troubling the Reserve Bank.
The bank lent a net $791 million on new mortgages in the three months to March.
Of ASB's new mortgage lending in the latest quarter, $565 million, or more than 70%, was to people with deposits of less than 20% of their home's value.
Nearly 21% of the total, or $165 million, was lent to people with deposits of less than 10%.
Based on Reserve Bank figures, ASB accounted for about 28.5% of new mortgage lending by banks in the latest three months compared with its market share of just above 22% at the end of December.
ASB's new mortgage lending in the March quarter was less than the $932 million it lent in the December quarter last year, but as recently as the June 2012 quarter, ASB's mortgage book was shrinking.
Earlier this month, the Reserve Bank said it will require banks to hold more capital against their riskier loans from the end of September, which will result in an average increase in banks' capital held for housing of about 12%. That will make such loans more expensive for the banks.
Such risky lending has grown from 23% of new mortgage lending in October 2011 to 30% now.