Kiwibank chief executive Paul Brock is crediting a lift in profit with industry-wide moves to make it easier to switch banks.
But Mr Brock says an eagerness by customers to reduce their debt levels while interest rates are low is making growth harder for the bank.
The New Zealand Post-owned bank lifted its half-year profit to December 31 to $58 million – a $20 million boost from the same period a year earlier.
In the same period two years ago, the bank made $14 million.
The profit helped New Zealand Post return a 68% jump in its own half-year result, which offset a continued slide in demand for core postal services.
Mr Brock says Kiwibank’s private market share has reached 10%. The figure represents a 1% growth on the same period a year ago. In the first half of last year the bank marked 800,000 customers.
“They’re the people who see us as their main bank – the ones they owe the most money to.”
He is coy about the bank’s ultimate customer-base target but says he has a goal to achieve 1% per annum.
Mr Brock says moves by the New Zealand Bankers’ Association two years ago to revise its Electronic Credit Systems Codes and Direct Debit Systems Code to assist with the ease of information swapping have encouraged more customers to Kiwibank.
“It’s easier than ever to change banks ... and can be effectively done with one simple phone call.”
May get more complicated
He admits swapping banks may get more complicated as the trend back to fixed mortgage rates gathers speed.
“Kiwibank was out there initially with some pretty good home loan offers and we still do today both in our variable and fixed rate loans. What you’re now seeing though is other banks getting out there and putting out reasonably aggressive rates as well, which shows the demand in the market is picking up.”
He is hesitant to overstate the confidence in the market and says he is still seeing plenty of economic uncertainty and “flatness” affecting the market.
Mr Brock says while the economic uncertainty and low interest rates continue, people are taking the opportunity to reduce some of their debts.
He has also hinted at changes to the bank’s in-store “customer experience” as people’s postal habits change.
Lunch-time queues could be out and self-service kiosks in as foot traffic to New Zealand Post shops dwindles.
“As people start to use other channels and start to use the internet and mobile phone for more activity, there may be fewer people going through those doors.
"The key area is how to make transactions in stores more efficient and a good example of that is the self-service kiosks – similar to the ones offered at airport check-in.”