Banking industry profits in the middle of the pack

Wednesday, 21 November 2012, 4:30 pm
Press Release: New Zealand Bankers' Association

Banking industry profits in the middle of the pack

The New Zealand Bankers’ Association today released long run bank profitability data which compares returns on equity for New Zealand banks against NZX listed companies.

Independent analysis undertaken by Massey University showed that retail banks’ average return on equity over the last five years fell in the middle of the range compared to NZX listed companies with a minimum market capitalisation of $100 million over the same period.

A comparison of return on equity over the last five years is set out in this table:

Click for big version.
Return on Equity: New Zealand banks compared to NZX companies
Five year (2008-2012) return on equity average for individual NZX companies (with a minimum market capitalisation of $100 million) and retail banks (shown in red) [The analysis does not include The Co-operative Bank as it became a registered bank in 2011. ] in descending order of performance.

“We wanted some analysis which put bank profitability in the context of other New Zealand businesses because there are a lot of views on bank profitability which we felt were overstated,” said New Zealand Bankers’ Association chief executive Kirk Hope.

Average bank returns on equity from 2008 to 2012 ranged from 7.5% to 16.3%, well below the top average return on equity of 31.7%.

“This analysis shows that banks fall in the middle of the range of profits compared to NZX listed businesses,” said Hope.

ENDS

Company	Code	5 Year ROE %
RESTAURANT BRANDS NEW ZEALAND LTD	RBD	31.7%
HALLENSTEIN GLASSON HOLDINGS LTD	HLG	28.5%
TELECOM CORP OF NEW ZEALAND LTD	TEL	26.8%
MICHAEL HILL INTERNATIONAL LTD	MHI	25.8%
THE WAREHOUSE GROUP LTD	WHS	25.6%
NEW ZEALAND EXCHANGE LTD	NZX	24.4%
OPUS INTERNATIONAL CONSULTANTS LTD	OIC	23.2%
FREIGHTWAYS LTD	FRE	22.5%
AMP LIMITED	AMP	22.2%
FISHER & PAYKEL HEALTHCARE CORPORATION	FPH	21.6%
MAINFREIGHT LTD	MFT	19.3%
RYMAN HEALTHCARE LTD	RYM	17.8%
SKELLERUP HOLDINGS LTD	SKL	16.8%
ASB BANK	ASB	16.3%
SKY CITY ENTERTAINMENT GROUP LTD	SKC	14.5%
TSB BANK	TSB	14.5%
BNZ BANK	BNZ	14.3%
DELEGAT'S GROUP LTD	DGL	14.3%
CAVALIER CORPORATION LTD	CAV	13.4%
EBOS GROUP LTD	EBO	13.1%
STEEL & TUBE HOLDINGS LTD	STU	11.4%
KIWI BANK	Kiwi	11.3%
VECTOR LTD	VCT	11.0%
TOWER LTD	TWR	10.8%
NUPLEX INDUSTRIES LTD	NPX	10.5%
WESTPAC BANK	Westpac	10.5%
NEW ZEALAND REFINING COMPANY LTD (THE)	NZR	10.3%
SKY NETWORK TELEVISION LTD	SKT	8.6%
ANZ BANK	ANZ	8.5% [Includes goodwill paid. ]
HELLABY HOLDINGS LTD	HBY	8.1%
TRUSTPOWER LTD	TPW	8.0%
PORT OF TAURANGA LTD	POT	7.5%
FLETCHER BUILDING LTD	FBU	7.5%
SBS BANK	SBS	7.5%
AIR NEW ZEALAND LTD	AIR	6.0%
SANFORD LTD	SAN	6.0%
CONTACT ENERGY LTD	CEN	5.6%
COLONIAL MOTOR COMPANY LTD	CMO	5.0%
AUCKLAND INTERNATIONAL AIRPORT LTD	AIA	3.9%
NEW ZEALAND OIL & GAS LTD	NZO	3.2%
VITAL HEALTHCARE PROPERTY TRUST	VHP	2.8%
METLIFECARE LTD	MET	2.6%
GOODMAN PROPERTY TRUST	GMT	1.7%
PROPERTY FOR INDUSTRY LTD	PFI	0.1%
PGG WRIGHTSON LTD	PGW	0.1%
GOODMAN FIELDER LTD	GFF	-0.3%
KIWI INCOME PROPERTY TRUST	KIP	-0.7%
GUINNESS PEAT GROUP PLC	GPG	-0.7%
ARGOSY PROPERTY LIMITED	ARG	-1.1%
INFRATIL LTD	IFT	-2.0%
FISHER & PAYKEL APPLIANCES HOLDINGS LTD	FPA	-2.8%
PRECINCT PROPERTIES NEW ZEALAND LTD	PCT	-4.3%
NATIONAL PROPERTY TRUST	NPT	-6.5%
PUMPKIN PATCH LTD	PPL	-13.8%
XERO LTD	XRO	-50.6%

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