More than half of 7,500-plus buyers were first-timers
Bank of New Zealand (BNZ) grew its home loan book by $4.9 billion in the year to 30 September 2026, gaining market share for a fourth consecutive year even as competition pressured its margins.
Home lending rose 7.7% to $68.8 billion, according to the bank’s full-year result. Statutory net profit fell 22.8% to $1,157 million. BNZ attributed the fall mainly to a one-off reduction in capitalised software assets after a change in its accounting policy, which it had flagged in April. Excluding that adjustment, profit was $1,410 million, down 5.9%. The bank pointed to market pressures and rising costs.
Total lending grew 6.8% to $118.5 billion, and customer deposits rose 4.9% to $91.4 billion. Revenue edged up 1.5% to $3,536 million. Operating expenses, excluding the one-off charge, climbed 4.2% to $1,437 million, driven by technology spending, more frontline staff, and inflation.
Competition squeezes margins
Net interest margin, the gap between what a bank earns on loans and pays on deposits, slipped 10 basis points to 2.30%. BNZ described the market for both lending and deposits as highly competitive.
First-home buyers lead purchase activity
BNZ helped more than 7,500 customers buy a first or next home during the year, and first-home buyers accounted for more than half of them. BNZ also pointed to savings for existing borrowers: customers using its TotalMoney offset product saved more than $160 million in interest.
Chief executive Dan Huggins (pictured) said household finances remain stretched despite signs of recovery, noting that “conditions remain challenging for some households, with higher living costs continuing to put pressure on budgets and discretionary spending”.
Business lending and outlook
Business lending rose 5.5% to $49.5 billion, and business customers lifted their credit limits by $4.8 billion, or 8.0%. BNZ said that points to growing confidence.
Huggins said the Middle East conflict had disrupted New Zealand’s recovery in 2026, but he struck a cautiously positive note for the year ahead.
“Barring any external shocks, we expect economic growth to strengthen through 2027,” he said.
That outlook comes as borrowing costs could rise again: the Reserve Bank of New Zealand held the official cash rate at 2.75% in October after a split vote, with economists still tipping a December hike.
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