BNZ delivers another positive result
31 October, 2013
BNZ delivers another positive result on back of key investment commitments
Continued strong performance saw Bank of New Zealand (BNZ) today reporting statutory net profit for its banking group for the year ended 30 September 2013 of $695 million. This is an increase of $115 million, or 19.8%, compared to the 2012 financial year.
Cash earnings of $788 million for BNZ’s New Zealand banking operations continues the bank’s positive growth trend over the past three years, and is an increase of $47 million, or 6.3%, over the September 2012 financial year.
BNZ’s drive for customer deposits has achieved excellent growth over the year, with average volumes increasing by $4.0 billion or 11.6%. Market share in deposits has also grown 49 basis points to 19.3%. The ongoing rebalance of BNZ’s funding base towards customer deposits supports the bank’s AA-/Aa3 credit rating.
BNZ CEO Andrew Thorburn says, “We are pleased with this result, which reflects strong performance across our target sectors in an environment of intense competition.
“The result is also a reflection of the investment we have made in key areas, and builds on our market strengths. Over the financial year we significantly invested in our brand and customer experience, including agribusiness and New Zealand’s vital SME sector. Our much sharper focus on the youth market and innovative digital products has also yielded pleasing gains for BNZ.”
“BNZ maintained its support for the expansion of businesses in New Zealand over the past year. A stand out performer was our agribusiness unit, growing market share by 29 basis points to 22.0%.”
Average lending volumes across BNZ’s business lending grew by $1.6 billion, or 5.6% over the last financial year. Housing growth was $1.1b or 3.9%.
Operating expenses rose by $28 million or 3.7%, due to increased investments in technology, improving customer service and BNZ’s brand campaign focussed on helping customers to be good with money.
“We’re particularly pleased that the new brand campaign has lifted our consideration among non-customers by 25%, a significant result in an environment where New Zealand customers have had more choice than ever before, and in which new regulatory pressure will test the sector as a whole,” Mr Thorburn said.
“BNZ’s $400m ‘NextGen’ transformation project will ensure our business remains relevant to our customers and profitable well into the future.
“Our strength, and the investments we’ve made, contribute significantly to New Zealand and New Zealanders. We employ more than 5,000 New Zealanders and pay some $250 million in tax,” says Mr Thorburn.
Bad and doubtful debts remained relatively flat compared with 2012, increasing by just $1 million or 1.0% due to an increase in collective provisioning.
“It is immensely pleasing that others are recognising BNZ’s drive for innovation and for making a difference.
“For the third year running we won the CANSTAR Best Small Business Bank award, acknowledging BNZ’s strong product suite and the valuable contribution the bank makes to the country’s small business sector overall,” said Mr Thorburn.
In a New Zealand first, BNZ launched PayClip in September, transforming smart phones and tablets into mobile credit and debit card payment machines. This technology is only available from BNZ. The bank also launched New Zealand’s first mobile for business offering making it easier for businesses to manage their money.
In recognition of BNZ’s commitment to customer service, the bank’s contact centre was internationally lauded with a gold award for Best Customer Service at the World Contact Centre Awards in June this year.
The BNZ Kiwisaver Scheme, launched in February, has gone from strength to strength and now has 25,000 customers and more than $100 million in funds under management. The conservative fund was recently awarded a five-star CANSTAR rating, with the balance and growth funds receiving a four-star CANSTAR rating.
Earlier this year BNZ was the inaugural winner of the United Nations Women’s Empowerment Principles Benchmarking for Change Award for its success in promoting gender equality and the empowerment of women.
“The New Zealand economy is embarking on a sustained, strong period of growth on the back of an accelerating dairy sector and construction industry. BNZ is proud of the contribution it is making to this story, through our investment, our innovation and the commitment of our people across New Zealand,” Mr Thorburn said.