New Zealand’s central bank says river flooding poses a greater risk to creditors’ mortgage portfolios.

In a statement, it said it focused its assessment on the exposure of banks to river and surface water flooding in the Auckland region.

“The results indicated that in a severe scenario, more than a quarter of existing bank mortgages in the Auckland area were on land at risk of flooding,” she said.

The study also asked banks to measure the exposure of mortgage portfolios to floodplains with varying degrees of sea level rise, ranging from 20 cm to one meter.

He pointed out that “the results showed that there were statistically significant differences in the percentage of mortgages on real estate located in the coastal flood area in various regions.”

These findings are part of the Financial Stability Report for November 2022, due out on Wednesday.

RBNZ Deputy Governor Christian Huxby said the aim of the exercise was to help banks build their capacity to identify climate risks and find solutions.

“This will lead to more proactive management of climate risks,” he said.