BNZ 1H cash earnings rise 4.5%
Bank of NZ first-half cash earnings rise 4.5% as lending growth drives interest income
By Jonathan Underhill
May 7 (BusinessDesk) - Bank of New Zealand,
the local unit of National Australia Bank, posted a 4.5
percent gain in cash earnings as growth in housing and
business lending, and lower funding costs, drove up net
interest income.
Cash earnings from New Zealand
banking operations rose to $418 million in the six months
ended March 31, from $400 million a year earlier, the lender
said in a statement. Net interest income climbed 7.8 percent
to $804 million. Net profit, which includes fair value
accounting adjustments and other items, rose 28 percent to
$502 million.
The lender's parent reported a
first-half cash profit gain of 5.4 percent to A$3.32
billion, although the operating results were overshadowed by
its announcement of an A$5.5 billion rights issue, allowing
National Australia Bank to demerge up to 80 percent of its
Clydesdale Bank unit in the UK, selling the remainder to
institutions in an initial public offering. The bank will
put up 1.7 billion pounds to cover potential losses from
legacy costs as it exits its troubled UK
operations.
In New Zealand, average lending volumes
rose by 4 percent in the first half, driven by a 4.7 percent
increase in housing volumes and a 3.5 percent gain in
business lending. BNZ's share of housing and business
lending was largely stable, it said. Total interest earning
assets rose by 4.5 percent to $67 billion. Customer deposits
grew by 7.4 percent to $44.8 billion.
The bank's
charge for bad and doubtful debts rose to $46 million from
$41 million. Operating expenses increased to $407 million
from $400 million.
BNZ's net interest margin widened
by 7 basis points to 2.41 percent.
National Australia's shares last traded at A$35.20 and have edged up 3.2 percent in the past 12 months, about matching the gain in the benchmark S&P/ASX 200 Index.
(BusinessDesk)