Kiwibank Financial Result 2010

Kiwibank Financial Result 2010

Kiwibank has announced an after-tax profit of $45.8 million for the year ended 30 June 2010, a decrease of 13% compared with the previous year’s profit of $52.5 million.

Chief Executive Sam Knowles described the result as “solid and consistent with a tough environment”.

He said the bank had emerged from the world recession in strong shape and was on track to increase profit over the coming year.

In the last year, Kiwibank:

• Increased loans and advances by 23% from $8.5 billion to $10.4 billion
• Increased retail deposits by 3% from $6.7 billion to $6.9 billion

Mr Knowles said the quality of the bank’s lending remains very strong with only 0.3% of loans considered impaired, the lowest of New Zealand main banks.

Mr Knowles said the bank’s financial performance was affected by the very strong competition in the domestic retail deposit market. This not only affected the amount of funds deposited with the bank, but impacted on the margin between borrowing and lending.

Mr Knowles said the deposit market had been affected by the Reserve Bank’s core funding ratio requirements. Banks must secure 65% of their funding from domestic deposits and bonds with terms of more than one year. This led to the Australian-owned banks competing more vigorously for deposits in the New Zealand market.

During the year Kiwibank raised $A250 million ($NZ309 million) through a bond issue and $150 million of Tier 1 capital through a share issue by a related company, Kiwi Capital Securities Ltd.

Kiwibank became prime sponsor of the New Zealander of the Year Awards with the inaugural award, announced by Prime Minister John Key, going to Ray Avery, a man who has assisted millions of people around the world through his medical innovations.

At the end of the financial year, Kiwibank launched its own KiwiSaver scheme promising more transparency on fees and more opportunities for those saving for retirement to actively manage their investments.

During the financial year Kiwibank was again awarded the Canstar/Sunday Star Times award of best value bank; the international Banker magazine award of New Zealand Bank of The Year and the most trusted bank brand by Reader’s Digest.

In May Mr Knowles also announced he was resigning from the bank but has continued as Chief Executive while a replacement was found. Mr Knowles has led Kiwibank since its inception The bank opened for business in early 2002 and now has more than 700,000 customers.

ENDS

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