ASB Bank's mortgage lending to people with small deposits shrank dramatically for a second quarter, even as its total new mortgage lending continued to grow strongly in the March quarter.
The bank's latest disclosure statement shows its mortgage book stood at $41.52 billion at the end of March, up $300 million over the three months.
But ASB's net new lending to people with less than a 20 percent deposit fell by $250 million in the three months ended March after dropping by $213 million in the December quarter.
Conversely, the bank's new lending to people with more than a 20 percent deposit jumped by $552 million in the latest quarter.
It's a dramatic turnaround for ASB.
The ASB was the most affected by the new Reserve Bank rules which, from October last year, have restricted the amount of any bank's lending to people with less than a 20 percent deposit to no more than 10 percent of new total mortgage lending.
In the September quarter last year, just under 40 percent of ASB's net new mortgage lending was to people with less than a 20 percent deposit and, in the June quarter, a whopping 73 percent of its new lending was to those with small deposits.
One of the reasons ASB has been able to curtail such lending so dramatically is that in September it withdrew all its pre-approvals for mortgages to people with less than a 20 percent deposit.
As at 31 March, ASB was committed to lending a further $622 million to people with small deposits, down from $649 million at 31 December.