Kiwibank aims to grow its share of the home loan pie

Wednesday, August 28th 2013, 10:57AM

Kiwibank made an after-tax profit of $97.1 million for the year ended June 30 2013, an increase of 22.8% over the previous year’s profit of $79.1 million.

In the last year, Kiwibank has increased loans and advances by 6.5% from $12.4 billion to $13.2 billion and increased customer deposits by 4.3% from $11.6 billion to $12.1 billion.

Kiwibank chief executive Paul Brock said there has been significant reduction of the bank’s provisioning for bad debts. Total provisions for impairment losses stood at $72 million as at June 30, compared to $91 million a year earlier.

Kiwibank continued to be a strong performer in the bank deposit market and customer deposits accounted for 84% of all bank funding.Kiwibank raised $150m of term subordinated debt during the year (in December), the first issue of Tier 2 qualifying securities in New Zealand under the Reserve Bank’s new Basel III rules.

In October 2012, Kiwibank’s credit rating was revised from AA- to A+ by international credit rating agency Standard & Poor’s. The accompanying outlook was initially stable, but downgraded to negative late in the financial year. The credit rating reflects the rating for New Zealand Post Group.
Again the year was characterised by a static home loan rate market with no changes to the Official Cash Rate.

Kiwibank and New Zealand Post continue to make progress on the project to enhance the look and service levels of the retail network and are well advanced with the transformation of the first group of shops on Auckland’s North Shore. A three year programme will change how both New Zealand Post and Kiwibank interact with customers.

Kiwibank continues to target growth in the personal retail banking market and is making strong growth in the SME (small and medium enterprise) business banking sector. It is placing significant emphasis on the quality of its lending in this sector.

Particular highlights for Kiwibank in Canterbury are the rapid improvement in lending volumes and market share. “Residential lending performance has significantly improved. The Canterbury region for Personal Markets drawdown volumes continued to accelerate hitting a new bank peak in June. Growth in lending at Kiwibank in Canterbury now exceeds the estimated pre-quake growth rates with a clear re-emergence of consumer lending demand following contraction in the asset base over the 2011/12 financial year. “

« ANZ says speed bumps will slow the housing market

Three of seven plead guilty to mortgage fraud »

Special Offers