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Banking industry profits in the middle of the pack

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

CompanyCode5 Year ROE %
RESTAURANT BRANDS NEW ZEALAND LTDRBD31.7%
HALLENSTEIN GLASSON HOLDINGS LTDHLG28.5%
TELECOM CORP OF NEW ZEALAND LTDTEL26.8%
MICHAEL HILL INTERNATIONAL LTDMHI25.8%
THE WAREHOUSE GROUP LTDWHS25.6%
NEW ZEALAND EXCHANGE LTDNZX24.4%
OPUS INTERNATIONAL CONSULTANTS LTDOIC23.2%
FREIGHTWAYS LTDFRE22.5%
AMP LIMITEDAMP22.2%
FISHER & PAYKEL HEALTHCARE CORPORATION FPH21.6%
MAINFREIGHT LTDMFT19.3%
RYMAN HEALTHCARE LTDRYM17.8%
SKELLERUP HOLDINGS LTDSKL16.8%
ASB BANKASB16.3%
SKY CITY ENTERTAINMENT GROUP LTDSKC14.5%
TSB BANKTSB14.5%
BNZ BANKBNZ14.3%
DELEGAT'S GROUP LTDDGL14.3%
CAVALIER CORPORATION LTDCAV13.4%
EBOS GROUP LTDEBO13.1%
STEEL & TUBE HOLDINGS LTDSTU11.4%
KIWI BANKKiwi11.3%
VECTOR LTDVCT11.0%
TOWER LTDTWR10.8%
NUPLEX INDUSTRIES LTDNPX10.5%
WESTPAC BANKWestpac10.5%
NEW ZEALAND REFINING COMPANY LTD (THE)NZR10.3%
SKY NETWORK TELEVISION LTDSKT8.6%
ANZ BANKANZ 8.5% [Includes goodwill paid. ]
HELLABY HOLDINGS LTDHBY8.1%
TRUSTPOWER LTDTPW8.0%
PORT OF TAURANGA LTDPOT7.5%
FLETCHER BUILDING LTDFBU7.5%
SBS BANKSBS7.5%
AIR NEW ZEALAND LTDAIR6.0%
SANFORD LTDSAN6.0%
CONTACT ENERGY LTDCEN5.6%
COLONIAL MOTOR COMPANY LTDCMO5.0%
AUCKLAND INTERNATIONAL AIRPORT LTDAIA3.9%
NEW ZEALAND OIL & GAS LTDNZO3.2%
VITAL HEALTHCARE PROPERTY TRUSTVHP2.8%
METLIFECARE LTDMET2.6%
GOODMAN PROPERTY TRUSTGMT1.7%
PROPERTY FOR INDUSTRY LTDPFI0.1%
PGG WRIGHTSON LTDPGW0.1%
GOODMAN FIELDER LTDGFF-0.3%
KIWI INCOME PROPERTY TRUSTKIP-0.7%
GUINNESS PEAT GROUP PLCGPG-0.7%
ARGOSY PROPERTY LIMITED ARG-1.1%
INFRATIL LTDIFT-2.0%
FISHER & PAYKEL APPLIANCES HOLDINGS LTDFPA-2.8%
PRECINCT PROPERTIES NEW ZEALAND LTDPCT-4.3%
NATIONAL PROPERTY TRUSTNPT-6.5%
PUMPKIN PATCH LTDPPL-13.8%
XERO LTDXRO-50.6%


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