ASB Bank's mortgage lending to people with less than a 20% deposit fell by nearly two-thirds in the September quarter compared with the June quarter.
The bank, which is owned by the Commonwealth Bank of Australia, lent $230 million in mortgages to people with small deposits in the three months to September, down from 625 million in the prior three months.
Its latest accounts show ASB lent a total of $581 million in net new mortgages in the quarter with high loan-to-valuation (LV) lending accounting for 39.59% of that.
While still high, that's much less than in the June quarter when 73% of ASB's total mortgage lending was to people with small deposits.
ASB has been the bank most affected by the Reserve Bank's rules which, from last month, have restricted the amount of any bank's high LV lending to no more than 10% of new total mortgage lending.
ASB's high LV lending is likely to be falling further in the current quarter because, in September, the bank withdrew all its pre-approvals for mortgages to people with less than a 20% deposit from 4 October.
The accounts show ASB had so many pre-approvals that it had little choice if it was to comply with the new restrictions.
At 30 September, ASB had approved $868 million in mortgages to people with small deposits which hadn't been drawn down, and that was down only a little from $909 million three months earlier.