But second half net profit falls as economy slows
BNZ has reported a solid financial performance for the fiscal year ending September 30, with a statutory net profit of $1,509 million – a 6.7% increase compared to the previous year.
The result reflected a strong first half, while a 12.5% decline in net profit in the second half was attributed to the broader economic slowdown in New Zealand.
BNZ CEO Dan Huggins acknowledged the challenging economic conditions affecting business and household confidence, which significantly impacted BNZ's second-half results.
“Inflation, while softening, remains high, and as the official cash rate has risen, businesses and households have taken a more cautious approach to borrowing,” Huggins said in a media release.
“Despite the slowing economy and intense competition across the banking sector, we’ve continued to see growth across the business as more New Zealanders choose to bank with BNZ.”
BNZ recorded a 5.8% surge in customer deposits, reaching $78.5bn compared to the same period last year. Meanwhile, home lending has grown by 5.3%, totalling $57.7 bn. Over the past 12 months, almost 5,000 home loan customers have transferred to BNZ from other lenders.
Other key financial items for the year ended Sept. 30 include:
- Loans and advances to customers increased to $102 billion, driven by home loan growth
- Customer deposits and other borrowings increased to $81bn by $2.8bn
- KiwiSaver funds under management increased by $733m, a 17% increase
- Total capital ratio at 15.7%, with more than $12bn invested in New Zealand
“With more than $12bn in total capital, we’re well positioned to continue supporting our customers and the New Zealand economy,” Huggins said.
BNZ’s commitment to customers
Recognising the cost-of-living pressures and concerns about scams and fraud among New Zealanders, BNZ has continued to offer support.
Huggins said the bank proactively reaches out to customers who may need additional support, especially those affected by higher lending rates.
In response to the rising incidence of scams and fraud, BNZ has continued to invest significantly in fraud protection measures. The bank also supports the establishment of a multi-agency anti-scam center and the introduction of account name and number matching, which is expected to enhance protection for customers.
Huggins added that the bank continues to collaborate with business customers facing ongoing challenges, including those affected by adverse economic conditions and severe weather events.
“We have made $1 billion in low-cost lending available through our Business Recovery and Resilience Fund, committed more than $50 million in interest relief, and provided nearly $900,000 in cash and community grants,” Huggins said.
Outlook
Looking ahead, economic growth is anticipated to remain flat for the next 12 months. However, Huggins remained cautiously optimistic that business and household confidence will begin to rebuild in 2024.
“New Zealanders are resilient, and while the year ahead will remain challenging, we are optimistic about New Zealand’s future potential and prosperity,” he said. “As BNZ has done for the past 160 years, we’ll continue to support our customers and New Zealand.”
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