BNZ profit tops $1b as Aussie business feels heat
Thursday, 7 November 2019
BNZ's chief executive Angie Mentis says she's 'absolutely intent' on disrupting the businesses of loan sharks and mobile traders.
The bank today announced a profit of $1.02 billion for the financial year, down $7 million on the year before due to one-off expenses.
Without those one-off movements, its profit would have lifted $23 million.
It did much better than its parent company in Australia.
**READ MORE:
* $550m profit for BNZ as bank makes more from loans
* BNZ customers get refund due to errors in loan documents
* Shane Jones slams 'Aussie-owned' banks for shutting branches in provincial NZ**
The overall group result was A$5.1 billion (NZ$5.5b), which was a drop of 10.6 per cent, year-on-year. That result included after-tax charges of A$1.1b for customer compensation, which the bank had previously disclosed.
As part of the announcement, BNZ marked five years of its partnership with Good Shepherd to provide community finance.
It said it had helped more than 1900 families get access to $5.16m in loans.
It is also now offering two The Good Shop mobile trucks in Manurewa and Porirua offering no and low-interest loans, as a counterpart to traders offering punitive credit contracts.
Mentis said it was an area that 'had to stop'.
She said the bank was operating in a challenging environment, as regulatory scrutiny increased in Australia and New Zealand. Both regulator and customer expectations were increasing, she said.
She said it forced the bank to think about what it was trying to do and whether it was delivering the best outcomes to customers interacting with it.
The Reserve Bank is expected to reveal the outcome of its consultation on proposals for higher capital requirements for banks next month.
Mentis said the BNZ had constructive dialogue with the central bank. It was already tilting more towards consumer and SME lending and that strategy would be the right one in a capital-constrained environment, she said.
'BNZ's focus on helping New Zealanders be good with money so they can do great things with it has seen growth in lending across business and consumer portfolios.
'This is supported by our continued emphasis on simplifying our products, improving our systems and fixing issues when we find them.'
BNZ helped more than 5000 New Zealanders into their first home, a 25 per cent increase on last year. It also lent money to more than 16,000 small and medium businesses.
'Last year, we made available $10 billion of lending over five years to small and medium enterprises outside of New Zealand's main centres and we know it is being put to good use across the country.'
Its net interest margin, the difference between what it charges people for loans and what it pays depositors, declined by two basis points to 2.25 per cent.
In addition to committing to no regional branch closures until at least 2022, BNZ launched its first mobile branch covering Foxton, Martin, Ōtaki and Pahiatua in the Manawatu-Whanganui region.
Since launching in June 2019, the Mobile BNZ has covered 8500 kilometres, the equivalent of travelling the length of New Zealand five times and has facilitated more than 600 conversations with customers who previously had no convenient branch to visit. Based on this positive response its availability will be extended to more regions next year.
During the year, BNZ cut 36 products from its range, removed overseas ATM fees and helped more customers to be digital first, reducing 2.8 million pieces of paper from its processes.
BNZ announced to its employees on Wednesday that all employees will receive six weeks' annual leave from January 1 – an increase from four weeks.
'We want to support our people to do their best work for our customers. More leave, extended parental leave as well as flexibility in how and where our people work, is in keeping with our focus on wellbeing. It means our people can work in a way that best suits them and we can empower them to grow and lead more balanced lives,' Mentis said.