Quality Growth Drives Strong Bank of New Zealand Result
Thursday 10 May 2007, 11:41AM
By Mediacom
467 views
Piggy bank Credit:
Bank of New Zealand
Strong growth in customer deposits and lending were key drivers in Bank of New Zealand’s interim profit result of $330 million for the six months ending 31 March 2007*, announced today. Managing Director Cameron Clyne said that the Bank was doing well in a tough market.
“This is a very satisfying outcome. Growth in underlying net profit (excluding IFRS fair value adjustments) is up 5.1% on the same period last year and 15.2% on the six months to September 2006. The past six months have been categorised by intense competition, not only in housing, but across all sectors. We continue to focus on our long term commitment to provide innovative products and services that enable our customers to be better off.â€Â
Highlights include:
Net Interest Income up 10.2% to $594 million compared to March 2006
Cost to income ratio improves by 1.2% (underlying)
Asset quality remains a strength, with the level of impaired assets at record lows
TotalMoney, allows customers to form groups to earn higher interest on deposits or save interest on a variable home loan – a New Zealand first
Customer satisfaction at record levels**
“The six month result has been underpinned by solid volume growth and sound asset quality. While the net margin declined 5bps compared to March 2006, it has improved 2bps since September. Our focus on disciplined cost management led by our Six Sigma and Lean initiatives has enabled us to drive greater efficiencies and improve customer service.â€Â
Overall market share trends were stable, said Mr Clyne, and, as in previous years, the Bank was not out to win business at any cost.
“Given the robust competition, this is a good result. Our focus has always been on writing profitable business, and preserving asset quality. â€Â
In March, the Bank launched TotalMoney, a first for the New Zealand market.
“TotalMoney delivers on our promise of being better off with Bank of New Zealand, and we have been pleased with the initial customer response.
“In a rising interest rate environment customers will increasingly look for ways to manage their interest costs, and offsetting with TotalMoney is a smart way to do that. Offsetting even a small amount can result in interest savings and accelerated loan repayment.
“In business banking and agribusiness we continue to build on our leading market position and commitment to our customers by providing unique educational opportunities with the ICEHOUSE (International Centre for Entrepreneurship) and our own Farm First Growth programmes.â€Â
In November, more than 20,000 people attended Bank of New Zealand Get Organised Auckland, the country’s largest garage sale, raising $400,000 for Preventing Violence in the Home.
“The new sponsorship partnership will enable ordinary kiwis to make a meaningful contribution to those whose lives are affected by domestic violence.â€Â
Bank of New Zealand, along with the rest of the National Australia Bank Group announced plans to reduce its impact on the environment by becoming carbon neutral by 2010.
“We are looking at ways that we can reduce our carbon footprint and we will work with our employees and customers to help them make a practical contribution to reducing the impact of climate change.â€Â
The outlook for economic and market conditions remained challenging said Mr Clyne, but Bank of New Zealand was well positioned to meet those challenges.
“The stability of provisions and margins confirms the success of our strategy to be the unbeatable bank.â€Â
Ends
* Financial statements available on request
**Consumer Finance Monitor March 2007, AC Nielsen
Key data for half year to 31 March 2007 (results to half year March 2006)
Net Interest Income: $594m ($539m) (+10.2%)
Total operating income: $895m ($767m) (+16.7%)
Total operating profit before tax: $495m ($383m) (+29.2%)
Net profit after tax: $330m ($270m) (+22.2%)
Half
year
Mar 06
$m Half
year
Sep 06
$m Half
year
Mar 07
$m Movt
Mar 07
v. Mar 06
%
Net Profit After Tax (reported) 270 335 330 22.2%
Less : Discontinued Operations (Custom Fleet) 4 41 -
Less: Fair Value Gains (non-Institutional) (8) 44 42 Lge
Net Profit After Tax (underlying) 274 250 288 5.1%
“This is a very satisfying outcome. Growth in underlying net profit (excluding IFRS fair value adjustments) is up 5.1% on the same period last year and 15.2% on the six months to September 2006. The past six months have been categorised by intense competition, not only in housing, but across all sectors. We continue to focus on our long term commitment to provide innovative products and services that enable our customers to be better off.â€Â
Highlights include:
Net Interest Income up 10.2% to $594 million compared to March 2006
Cost to income ratio improves by 1.2% (underlying)
Asset quality remains a strength, with the level of impaired assets at record lows
TotalMoney, allows customers to form groups to earn higher interest on deposits or save interest on a variable home loan – a New Zealand first
Customer satisfaction at record levels**
“The six month result has been underpinned by solid volume growth and sound asset quality. While the net margin declined 5bps compared to March 2006, it has improved 2bps since September. Our focus on disciplined cost management led by our Six Sigma and Lean initiatives has enabled us to drive greater efficiencies and improve customer service.â€Â
Overall market share trends were stable, said Mr Clyne, and, as in previous years, the Bank was not out to win business at any cost.
“Given the robust competition, this is a good result. Our focus has always been on writing profitable business, and preserving asset quality. â€Â
In March, the Bank launched TotalMoney, a first for the New Zealand market.
“TotalMoney delivers on our promise of being better off with Bank of New Zealand, and we have been pleased with the initial customer response.
“In a rising interest rate environment customers will increasingly look for ways to manage their interest costs, and offsetting with TotalMoney is a smart way to do that. Offsetting even a small amount can result in interest savings and accelerated loan repayment.
“In business banking and agribusiness we continue to build on our leading market position and commitment to our customers by providing unique educational opportunities with the ICEHOUSE (International Centre for Entrepreneurship) and our own Farm First Growth programmes.â€Â
In November, more than 20,000 people attended Bank of New Zealand Get Organised Auckland, the country’s largest garage sale, raising $400,000 for Preventing Violence in the Home.
“The new sponsorship partnership will enable ordinary kiwis to make a meaningful contribution to those whose lives are affected by domestic violence.â€Â
Bank of New Zealand, along with the rest of the National Australia Bank Group announced plans to reduce its impact on the environment by becoming carbon neutral by 2010.
“We are looking at ways that we can reduce our carbon footprint and we will work with our employees and customers to help them make a practical contribution to reducing the impact of climate change.â€Â
The outlook for economic and market conditions remained challenging said Mr Clyne, but Bank of New Zealand was well positioned to meet those challenges.
“The stability of provisions and margins confirms the success of our strategy to be the unbeatable bank.â€Â
Ends
* Financial statements available on request
**Consumer Finance Monitor March 2007, AC Nielsen
Key data for half year to 31 March 2007 (results to half year March 2006)
Net Interest Income: $594m ($539m) (+10.2%)
Total operating income: $895m ($767m) (+16.7%)
Total operating profit before tax: $495m ($383m) (+29.2%)
Net profit after tax: $330m ($270m) (+22.2%)
Half
year
Mar 06
$m Half
year
Sep 06
$m Half
year
Mar 07
$m Movt
Mar 07
v. Mar 06
%
Net Profit After Tax (reported) 270 335 330 22.2%
Less : Discontinued Operations (Custom Fleet) 4 41 -
Less: Fair Value Gains (non-Institutional) (8) 44 42 Lge
Net Profit After Tax (underlying) 274 250 288 5.1%