Economy

BNZ posts slight rise in full-year underlying profit

BNZ has delivered a steady full-year profit, despite a squeeze on interest rate margins and increased provisions for bad debt.

The Australian-owned bank's net profit for the year ended September dropped slightly by $7 million (or 0.7 percent) to $1.02 billion.

The bottom line was hit by a number of one-time items, including a drop in the value of its software, which was partially offset by a gain from the sale of its 25 percent share in the payments company, Paymark, as well as an insurance settlement related to earthquake damage to its premises in Wellington.

Underlying profit rose 2.2 percent when the one-time items were excluded. The bank's revenue rose 6.8 percent of $2.5bn, while expenses rose 8.6 percent.

"We are removing barriers, taking the complexity out of banking, investing in technology and accelerating digital solutions," BNZ chief executive Angie Mentis said.

Net interest income was up nearly 6 percent, but the low interest rate environment drove margins down about 2 basis points to 2.25 percent.

The bank said there was a 25 percent increase in mortgages to first home buyers, with 16,000 new loans or increased lending to small and medium sized businesses.

Overall bank loans rose nearly 6 percent over the past year, while deposits rose more than 7 percent.

However, the bank's provision for bad debts rose 39 percent to $144m, related to a small number of large corporate dairy farms.

BNZ's Australian parent NAB reported a 13.6 percent drop in net profit to $AU4.8bn, which included A$1.1bn to compensate customers over the past year.

NAB said the BNZ's lending growth was one of the highlights for the growth.

This article was originally published on RNZ and re-published with permission.

We value fearless, independent journalism. We hope you do too.

Newsroom has repeatedly broken big, important national news stories and established a platform for quality journalism on issues ranging from climate change, sexual harassment and bullying through to science, foreign affairs, women’s sports and politics.

But we need your support to continue, whether it is great, small, ongoing or a one-off donation. If you believe in high quality journalism being available for all please click to become a Newsroom supporter.

Become a Supporter

Comments

Newsroom does not allow comments directly on this website. We invite all readers who wish to discuss a story or leave a comment to visit us on Twitter or Facebook. We also welcome your news tips and feedback via email: contact@newsroom.co.nz. Thank you.

With thanks to our partners