BNZ posts flat $1.49 billion annual profit as recovery drags its feet

Thursday, 6 November 2025

BNZ’s modest profit drop followed Westpac’s announcement of an increase in profit.

BNZ has posted an after-tax profit of $1.49 billion in the 12 months to the end of September.

That represented a fall of 0.5% on last year’s profit of $1.5b.

BNZ chief executive Dan Huggins said the drop reflected the current economic environment in which “New Zealanders continue to navigate an economy that is taking longer than anticipated to recover”.

BNZ’s revenue was down by 3.7%, while its total lending increased 4.6% with home lending up 6.4% and business lending up 2.2%.

The BNZ profit announcement follows that of Westpac on Monday, in which it reported a profit increase of 13%, though some of that came from Westpac being able to provision less for losses on loans as household finances improved.

However, the two announcements covered a 12-month period in which households were tested by a cost-of-living crisis.

Kent Duston from the Banking Reform Coalition ripped in the big four banks’ excess profits at the Finance and Expenditure select committee on Wednesday.

New Zealand First MP David Wilson called out banks for their high profitability in Parliament on Wednesday.

Wilson said a total of around $8b in dividends were paid by ANZ, Westpac, BNZ and ASB to their Australian owners, likening it to: “the modern day equivalent of the Vikings coming for your treasury.”

Huggins said many home loan borrowers had seen their repayments drop as a result of lower mortgage rates, however, he acknowledged home loan margins had increased enabling the bank to make more from each loan.

“Nearly 50% of our home loan customers are now on interest rates of 5% or less,” he said.

“Customers are making the most of the falling interest rate environment by paying their loans down faster, with more than 50% of customers’ home loan accounts projected to be ahead on their repayments by more than two years.

Serious struggles among home loan borrowers remained limited, Huggins said.

He said 276 mortgages out of 124,000 home loans BNZ had outstanding were behind on repayments by more than 90 days, a length of time it is hard to recover from.

Last month the Taxpayers’ Union/Curia poll showed the left-leaning political bloc of Labour, the Green Party and Te Pāti Māori slightly ahead of the right-leaning bloc of National, ACT and NZ First.

However, BNZ is forecasting mildly positive economic news ahead of next year’s general election, which must be held by December 18.

A “challenging” economy in New Zealand had reached a turning point, and the Government could look forward to a recovery in real GDP growth next year of 1.2%.

Unemployment, currently 5.3% would drop to around 4.8% by the time the election was held.

However, the recovery was far from even across the country, as data from credit reporting company released earlier this year showed with Southerners experiencing a faster, earlier recovery than North Islanders.

“We think that’ll continue,” Huggins said.

“If you’re in the South Island, if you’re in Queenstown, Southland, right now, you’re feeling quite good. Those parts of the economy are quite different to Wellington or Auckland.

“Similarly, if you’re in the agricultural sector, or the tourism sector, things are okay and looking up. If you’re in manufacturing or consumer discretionary, things are a bit more challenging,” he said.

Huggins said BNZ had increased market share in business lending, and remained the largest lender to the productive economy in the country.

A presentation to shareholders of BNZ’s parent National Australia Bank, the shares of which are traded on the ASX Australian sharemarket, showed BNZ had opened up a popularity gap on the other four big banks among households as measured by its net promoter score (NPS).

NPS measures the net likelihood of customers recommending an organisation to other people, and is calculated by subtracting the proportion of customers who are “detractors” and score it zero to six on a scale of zero to 10 from customers who are “promoters” and score it 9 or 10.

BNZ had a NPS of 38 compared to the other four big banks, none of which were named in the presentation, of 30, 25, 19 and 16.

However, while all the big five banks had positive NPS scores for households, only two were positively rated by more business customers than either viewed them negatively, or naturally.

BNZ slipped into negative territory with an NPS of -1.