Westpac most exposed to property investor mortgage market

Macquarie Group research suggests Westpac was the most exposed to the property investor market, with investor lending accounting for 44% of its mortgage book.

Some 34% of CBA's book is investor lending, 29% at the ANZ and 28% at the NAB.

Westpac has the greatest exposure to the New South Wales property investor market.

The introduction of macroprudential policy to slow growth in parts of the residential property market could result in a decline in credit growth of as much as 7%, according to the Macquarie Group research.

It also concluded macroprudential policy could result in a 1% fall in big bank earnings, the banking website BankingDay reported.

UBS analyst Jonathan Mott recently said that after the financial system inquiry, it was inevitable the major banks will be required to hold more capital; with the requirement in the form of higher mortgage risk weights and additional capital buffers. 

Macquarie is expecting ANZ to report a net profit of $6.9 billion (up from $6.3 billion), when it releases its 2013/14 financial report this week. 

It expects Westpac to report a net profit of $7.5 billion (up from $6.8 billion).

And it expects NAB to report a net profit of $4.9 billion (down from $5.4 billion). NAB has already announced a $964 provision relating to UK conduct charges.

Macquarie analyst Mike Wiblin said the banks would ultimately pass on the costs of higher capital to customers by reducing the interest rate paid on their deposits.