BNZ said there had been increased lending and deposits. (File photo) Photo:
The Bank of New Zealand has reported steady profits with increased lending, deposits, and margins despite a slow economy.
Key numbers for the year ended September compared to the previous year:
- Net profit $1.499b vs $1.506b
- Cash profit $1.52b vs $1.44b (excludes one-offs)
- Revenue $3.48b vs $3.62b
- Expenses $1.38b vs $1.39b
- Net interest margin 2.43 pct vs 2.37 pct
- Impairments $27m vs $146m
BNZ chief executive Dan Huggins said the result reflected the weak economy and delayed recovery which has pressured households and businesses.
"Over the past 12 months, we've focused on what matters most - supporting our customers and continuing to invest in initiatives to make banking simpler, easier and more accessible."
Lending increased about nearly 5 percent, with home lending rising at nearly three times the growth in business loans.
Huggins said first home buyers accounted for about a third of mortgages, and nearly half of its borrowers were on home loans of 5 percent or less.
"Customers are making the most of the falling interest rate environment by paying their loans down faster, with more than 50 percent of customers' home loan accounts projected to be ahead on their repayments by more than two years."
Deposit growth was close to 6 percent higher to a record level, while its net interest income - the difference between what the bank borrows at and what it charges - was also about 6 percent higher.
Overall revenue was lower because of reduced returns from other financial and investment operations.
Its interest margins, a measure of profits, rose to 2.43 percent from 2.37 percent.
More customers, lower bad debts
Huggins said BNZ, owned by Australia's NAB, gained more than 100,000 new customers over the year.
The BNZ's operating expenses were marginally lower, while it said it has been upgrading its branch network, and progressed open banking through third party finance groups.
The BNZ reduced the amount set aside for bad and doubtful debts to $23m from $157m a year ago.
Huggins said the economy was belatedly turning the corner but the outlook was brighter.
"New Zealand's primary export sector is experiencing buoyant conditions driven by high export prices, a lower NZ dollar, and solid production.
"Manufacturing and tourism activity is recovering, and building consents and job ads are starting to lift after a long period of low activity."
Huggins said the BNZ was well capitalised and set to support customers.
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