Kiwibank has declared a profit of $13.9 million after tax for the six months ended December 31, a 41% drop from its $23.5 million profit for the same period in 2009.
New Kiwibank chief executive Paul Brock described the result as having “a strong underlying performance impacted by the inevitable effects of the global financial crisis that has resulted in increased provision for bad debts”.
The bank has increased provisions for bad debts from $19.5m to $45.5m, a 133% increase.
In the six months to December 31 total lending (home loans, business banking and credit cards) increased 5% from $10.4 billion to $10.9 billion.
Retail deposits increased 10% from $6.9 billion to $7.6 billion
Total income for the period was up $15 million to $169 million (9.9%) and operating expenses were up $7 million to $118 million (6.6%).
Net-interest-income has increased from $66.3m to $89.3m (1.19% to 1.42% of total assets), the increase being driven mainly by the higher margin variable loans compared to fixed loans.
Mr Brock said the bad debts were largely from unsuccessful business investments and very few involved domestic home owners.
Mr Brock said the level of at-risk loans remained very small compared with the total lending portfolio and reflects falling value of certain classes of property collateral and remains modest when compared with other banks.
Mr Brock said there had been many positive developments during the last six months including the launch of the bank’s own Kiwisaver scheme and the Notice Saver investment product, that has attracted more than half a billion dollars in less than six months.
Mr Brock said the outlook for continued growth of the bank was very positive. “After nearly nine years we are continuing to build market share; continuing to build our loan and deposit portfolios and most importantly continuing to make a positive impact on the New Zealand banking sector.”
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Tony Gibson looks at the opportunities for Ports of Auckland’s new multi-million dollar freight hub
- ASB Bank's CEO Barbara Chapman discusses the mortgage and dairy lending markets
- Green party co-leader James Shaw and Business NZ manager of energy and environment John Carnegie discuss the ETS review - part 2
- Nevil Gibson breaks down the New Hampshire primary result in his latest Editor's Insight
- Green party co-leader James Shaw and Business NZ's John Carnegie go head-to-head on the ETS review - part 1