Westpac Banking Corp's New Zealand unit lifted annual earnings 22% as it grabbed more market share and squeezed more from its interest margins, making it the fastest-growing unit of the Australian lender.
Cash earnings rose to $707 million in the 12 months ended September 30, from $578 million a year earlier, the Sydney-based lender says in a statement. That accounted for about 9% of the group's $A5.97 billion net profit.
The New Zealand unit increased net operating income 7% to $2.01 billion and cut its impairment charge for bad loans 21% to $191 million. The bank's net interest margin widened 8 basis points to 2.72%.
"Despite subdued economic conditions, the business achieved sound balance sheet growth, improved margins, strong wealth and insurance cross-sell and well-managed expenses," the lender says.
Westpac NZ increased term deposits 11% to $23.1 billion as at September 30 and grew net loans 3% to $59.4 billion. Of that, mortgages grew 3% to $35.4 billion and business loans rose 4% to $21.8 billion.
New Zealand chief executive Peter Clare says agriculture is a strong performer for the bank, which grabbed nearly half a percentage point of market share.
"We remain committed to supporting agriculture in New Zealand and our ongoing investment into the sector will see 20 new frontline agri-bankers employed in the next 12 months."
Mr Clare was more upbeat about the prospects for New Zealand's economy, saying it is well placed for growth compared to international peers.
"The key now is moving from caution to confidence and investing for future growth," he says.
The Australian group lifted cash earnings 5% to $A6.6 billion, with a 6% gain in revenue to $A17.98 billion.
The board declared a fully-franked final dividend of 84 Australian cents, with a November 15 record date. That takes the annual payout to $A1.66 a share.
Westpac's dual-listed shares were unchanged at $31.55 on the NZX.