1 Nov 2018

Demand for home loans tip BNZ's profit over $1b again

12:07 pm on 1 November 2018

The Bank of New Zealand's annual profit has tipped over $1 billion for the second time, reflecting an uptake in loans for homes and businesses, and improved margins.

House sold sign, house auction sign, key.

Home loans for New Zealand buyers helped boost BNZ's profits. Photo: RNZ / 123rf

BNZ's net profit for the year to September was up 10 percent to $1.03b, compared to $937 million the year prior. Its net profit was over $1b in the 2015 financial year.

Revenue increased 7 percent to $2.4b, as lending for housing and businesses increased 6 percent and 3 percent respectively.

BNZ chief executive Angela Mentis said the strong financial year result showed supporting New Zealanders to buy homes was profitable.

"In the past year we also helped more than 14,000 New Zealanders realise their home ownership goals," Ms Mentis said.

BNZ's net interest margins - the profit gained from interest on loans - increased about 3 percent.

It spent almost $1b on expenses, including investment in technology, while keeping its cost to income ratio consistent with the previous year.

Ms Mentis said the bank would not make any changes to its physical branch network over the next year.

BNZ's Australian parent, NAB, posted an A$5.5b net profit, compared to the previous year's A$5.3b profit.

NAB's revenue growth was flat, but its expenses increased almost 18 percent, or by A$1.4b, after repayments to customers, associated with the Australian royal commission of inquiry as well as restructuring.