Kiwibank profits slips almost 20% despite increased business and home lending

Friday, 21 February 2020

Kiwibank increased its lending but saw profits fall year-on-year in the six months to the end of December.

Releasing its half-year results on Friday, chief executive Steve Jurkovich said the bank had outperformed the market in lending and deposits.

Business lending was up 17 per cent and home loans up 4 per cent.

'Our purpose is to be the New Zealand-owned bank that makes Kiwis better off. We deliver on this purpose when we support more Kiwis with their home ownership goals, business growth, and savings ambitions. As we position ourselves for the future our focus is providing simple, relevant and competitive offerings.'

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Kiwibank made $51 million in the six months ended December, which was down 18 per cent compared to the six months to the end of December 2018.

Kiwibank is adding more standalone branches.

But it was up 10.9 per cent from the six months to June.

Jurkovich said the bank had increased operating costs because of customer growth, accelerated investment in its transformation programme and increased risk and compliance investment.

Jurkovich said Kiwibank continued to transform its retail branch network, with new standalone branches providing dedicated banking staff, specialist services, and private spaces for banking conversations.

It has been separating its services from NZ Post branches around the country.

'Investment in standalone branches does mean changes to our extensive network but we continue to maintain the largest retail footprint of any bank in New Zealand, while responding to our customers' clear preference to carry out their day-to-day banking online.'

Jurkovich said Kiwibank was on track to be cheque-free from the end of February, and he was confident the bank was supporting its customers through the change.

'Since we announced we were going cheque-free nine months ago, we have provided training to thousands of customers through one-on-one and small supportive group sessions at our branches, with our Stepping UP digital banking workshops, and utilising the convenience of our digital support hub,' he said.

Jurkovich said continued investment was required to ensure Kiwibank was fit to deliver on its purpose, as it transformed to become a better, bolder and more sustainable bank.