That meant its share of mortgages written by registered banks rose to 1.44% from 1.42% three months earlier and compared with 1.25% in September 2008.
Of TSB's mortgage book, 16.4% had loan-to-valuation ratios (LVRs) above 80%, down from17.1% three months earlier. Much of those loans were government-backed Welcome Home loans which totalled $217.6 million at September 30 compared with $177.5 million at June 30.
Despite its mortgage book growing, TSB's September quarter net profit fell 26.4% to $10.6 million, partly due to the interest it paid on deposits growing faster than interest it earned from lending to customers.
Its interest income rose 9.8% in the three months while its interest expense rose 18%.
A $3.5 million tax charge reflecting changes to depreciation rules and the company tax rate dropping from 30% to 28% also dented its bottom line.
TSB's charges against profit for bad loans are falling, in line with other banks. Such charges fell to $499,000 in the latest three months from $947,000 in the September quarter last year.