Westpac shares have dropped almost three per cent after the bank followed its rivals in reporting an increase in doubtful debts over the third quarter.
The lender on Thursday said the increase in stressed assets was partly due to higher mortgage delinquencies in WA, SA and Queensland as mining-related areas came under particular pressure.
Westpac said the rise in mortgage repayments more than 90 days overdue and an increase in assets on its watchlist had pushed its stressed exposures for the three months to June 30 up to 1.15 per cent of total exposures.
The figure was 1.03 per cent in the previous quarter.
The increase in watchlist and substandard assets to $1.4 billion included an increase in the proportion of New Zealand dairy industry loans classified as stressed - from 10.04 per cent to 14.28 per cent in three months.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
The proportion of impaired loans in the NZ dairy portfolio doubled to 0.26 per cent, while resource-related loans under stress grew from 3.03 per cent to 3.15 per cent.
At 1350 AEST, Westpac shares were down 91 cents, or 2.95 per cent, at $29.90.
Shares in rival ANZ, which in May increased its provision for bad and doubtful debts to $918 million, were down 1.55 per cent as the financial sector led the benchmark S&P/ASX200 lower.
National Australia Bank was down 1.4 per cent and Commonwealth Bank was down 1.96 per cent.
