Westpac reports mortgage stress in WA

Westpac has reported a further rise in the number of people missing mortgage payments with Western Australia continuing to be the main problem area.

Australia's second-largest bank said mortgage delinquencies; i.e. secured loans that were overdue by 90 days or more, were up eight basis points over the June quarter to 0.9 per cent of its Australian mortgage portfolio.

WA was by far the worst state, with about two per cent of mortgage-secured loans classified as delinquent. 

Recent reports by other banks have also shown that WA is the worst performing state.

Westpac said it has 550 properties in possession nationally, an increase of 68, with the increases mostly in WA and Quensland.

"Higher stress in (the) portfolio combined with softness in property market contributing to an increase in the time it takes to sell a property have contributed to the rise in delinquencies and properties in possession," Westpac said in a statement to the ASX.

Westpac released data showing the quality of its loan book was better than its 'big 4' peers.

It said impaired assets and loans past 90 days due equated to 0.76 per cent of its total residential mortgage exposures.

Its peers ranged from 0.77 per cent up to 0.89 per cent.

Many observers hope back-to-back Reserve Bank rate cuts in June and July will boost consumer sentiment across the housing market, which may also get a lift from recently passed tax cuts.

The proportion of assets classified as stressed rose in the third quarter by 10 basis points to 1.2 per cent, the lender said in a limited third-quarter update.

The Sydney-based lender's common equity Tier 1 capital ratio, a measure of the bank's core equity capital, inched down to 10.5 per cent at the end of June from 10.6 per cent at March 31.