By Nikki Mandow
Nov. 2 (BusinessDesk) - As the banking industry holds its breath for the verdict on bank conduct and culture next Monday
from the Reserve Bank and Financial Markets Authority, BNZ is defending its almost double-digit profit boost announced
yesterday.
BNZ’s net profit rose 9.8 percent in the year ended September 30, sneaking just over $1 billion. Total operating revenue
was up 6.2 percent to $2.5 billion.
On Wednesday, ANZ New Zealand reported an even larger net profit increase - up 12 percent to $1.99 billion, including
unrealised gains on financial instruments and insurance policies. ASB’s annual profit (for the June year) was up 10
percent to $1.2 billion, while Kiwibank posted a 3 percent underlying profit rise to $133 million for the same period.
Westpac is expected to report healthy gains too, when it reports on Monday.
The RBNZ and FMA investigation comes after sometimes shocking revelations from the Australian Royal Commission into
Misconduct in the Banking, Superannuation and Financial Services Industry. The focus from the local regulators is firmly
on making sure banks provide products and services which benefit customers, not just the banks’ bottom lines.
As FMA chief executive Rob Everett wrote in the annual report last week: “The importance of good conduct has been
clearly underlined. We are determined to play our part to ensure this opportunity for customer-centric conduct to be
permanently embedded in the culture of the financial sector is not lost.”
Talking to BusinessDesk after the profit announcement yesterday, BNZ chief executive Angie Mentis said the bank will
focus in 2019 on “making sure we are providing the right outcomes for customers”.
This includes $10 billion over five years available for lending to businesses outside the three main cities, commitment
to simplify fees and halving the number of products it offers, and an investment of $250 million over three years in
unspecified “initiatives to accelerate its drive to deliver a world-class, fast and simple banking experience for
customers”.
The bank previously announced it was getting rid of sales targets for frontline staff after concern from consumer
bodies, unions and regulators that pressure on staff to meet quotas could be pushing them to sell unsuitable products.
Mentis, who took the top job at BNZ in January after 11 years at parent National Australia Bank, says the fact NAB’s New
Zealand unit performed better than Australia reflected underlying factors like a stronger economy, better housing sales
and low unemployment rather than tougher regulatory scrutiny in Australia.
She said customer satisfaction is stronger in New Zealand than across the Tasman and BNZ still has good customer trust
levels.
In terms of vulnerable customers, Mentis said BNZ has committed to offering low or no interest loans to customers
without access to bank credit and over the last 12 months had helped 1500 customers, saving them almost $2 million in
interest payments.
"It's about sustainability. We are here for the long term," she said.
(BusinessDesk)
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