Efficiency and Investment Support Sound Result for BNZ

Media Release
9 May, 2013

Efficiency and Investment Support Sound Result for BNZ

Bank of New Zealand (BNZ) has today reported statutory net profit for its banking group for the first six months to 31 March 2013 of $298 million, demonstrating continued strong performance for the bank. This is an increase of $70 million, or 30.7%, over the September 2012 half year.

Cash earnings for BNZ’s New Zealand banking operations of $387 million continues the bank’s positive growth trend of the past three years, and is an increase of $31 million, or 8.7%, over the September 2012 half year.

BNZ CEO Andrew Thorburn said, “This is a robust result for BNZ, testament to our continued investment in the things that really matter; our customers, staff and network. It is a great time to be a customer and more than ever we’re intensely focussed on innovating and investing for the benefit of New Zealanders, and our customer satisfaction ratings continue to perform strongly.  

“Actively growing our deposit base, diversifying our presence in wholesale funding markets and holding prudent levels of liquidity represent a significant contribution to maintaining BNZ’s rock-solid balance sheet and support our AA-/Aa3 credit rating.”

Average volumes of customer deposits over the prior comparable period grew by $3.6 billion or 10.7%.

Mr Thorburn said that a deep customer focus, investment and drive for innovation continues to deliver big wins for BNZ and ensures the company maintains its significant contribution to New Zealand on a wide range of fronts.

“BNZ’s ongoing support of New Zealand businesses is driving increased lending growth to business, particularly in the country’s important agricultural sector. Total average lending volumes grew by $1.9 billion or 3.3% over the prior comparable period.”

Improving economic conditions and customers benefitting from the low interest rate environment have contributed to a 12.5% decrease in the charge to provide for bad and doubtful debts over the September 2012 half year. The overall quality of BNZ's lending portfolio has continued a trend of gradual improvement during the current half year with a reduction in impaired assets across business, agricultural and retail exposures.

The bank’s continued investment programme has contributed to a rise in operating expenses, which are up $7 million or 1.8% over the September half year.

A growing focus for BNZ is its investment in digital channels which customers are enthusiastically adopting, particularly in the youth segment with the bank’s Canstar Innovation Excellence Award-winning YouMoney product, launched in February. Another significant investment, BNZ’s much anticipated KiwiSaver scheme, has gained more than 8,500 customers in the 10 weeks since its February launch.

BNZ has made great strides in its gender diversity aspirations and has equal representation at its executive team and at entry level management (50%). It has made advances in its senior management representation of 24% by building strength in its talent pipeline.  The bank's target at this level is 26% by financial year end.

Earlier this year BNZ was the inaugural winner of the United Nations Women’s Empowerment Principles Benchmarking for Change Award for its success in promoting gender equality and the empowerment of women.

“The award reinforces how serious we are about gender equality at BNZ, and it’s an issue we’ll continue to advocate for publicly as part of a wider conversation about taking New Zealand business in new directions.

“On a range of key issues – our poor national savings record, policy settings, and the training and skills we equip our young people with - business has a responsibility to speak up and offer practical solutions that will make a positive difference to New Zealand’s future,” Mr Thorburn said.

http://img.scoop.co.nz/media/pdfs/1305/BNZ_1H13_Media_Release_9_May_2013.pdf

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