BNZ announces $1b profit

Thursday, 1 November 2018

Angie Mentis said strong bank profits were a sign of customer success.

BNZ has reported a profit of $1.029 billion for the 2018 financial year, an increase of almost 10 per cent on last year.

Total operating revenue increased 6.2 per cent to $2.5 billion, due to strong growth in lending to businesses and homeowners, combined with growth in customer deposits.

'BNZ has been supporting the ambitions of our business customers to invest in their enterprises with $8.3 billion in new lending in FY18. In the past year we also helped more than 14,000 New Zealanders realise their home ownership goals. Supporting our customers and their communities is at the very centre of who we are at BNZ,' said chief executive Angie Mentis.

Housing lending increased by 6.4 per cent to $39.8b. Chief financial officer Peter MacGillivray said the market had stabilised to a more sustainable level over the past 12 months. 'The Reserve Bank has done a good job with loan-to-value restrictions of slowing growth down.'

* Counting the cost of the Australian banking scandal

BNZ has reported a profit of more than $1 billion.

* Bank profits race ahead of rest of NZ's earnings**

There have been suggestions those restrictions could be eased further before long but MacGillivray said the bank was comfortable with them in their current settings.

Mentis said, apart from Auckland and Canterbury, much of the New Zealand housing market was still experiencing strong growth. MacGillivray said they expected those conditions to persist for the time being.

BNZ will set aside $10b for lending to businesses outside Auckland, Wellington and Christchurch over the coming five years. Mentis said that amount was more than it had committed in the past.

'It's important we support New Zealand businesses wherever they are based,' she said.

'With $10b available for lending over the next five years, we'll back business owners outside Auckland, Wellington and Christchurch to help create meaningful jobs and opportunities in their towns and communities.'

BNZ is also trialling initiatives aimed at finding new ways to deliver personalised banking to more customers across New Zealand.

This will be in addition to the 153 BNZ branches. 'While we trial these initiatives over the next year, there'll be no changes to our branch network,' Mentis said.

BNZ is about to commission its first BNZ mobile branch, expected to be on the road early in 2019. 'The mobile branch is designed to provide our customers with the best of BNZ banking services at their local centre on a regular basis. Supporting our first-class bankers will be the latest technology to deliver the right services and advice to all of our customers,' she said.

She said personal banking customers now most often interacted with the bank online and outside normal business hours.

A third of business customers were using banking outside business hours and there needed to be strong support for them, she said.

This year's profit is not a record for BNZ but Mentis said large bank profits as have been reported in recent years were a sign of customers' success, too.

'If customers are successful and achieving their goals and aspirations then we are successful. It starts with the customer.'