Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Bank Of New Zealand Announces Strong Profit Result

Bank Of New Zealand Announces Strong Profit Result

Bank of New Zealand today announced a strong underlying profit result of $562 million for the financial year ending 30 September 2003. This represents an increase of 9% in underlying profit over the previous year, and reinforces the fundamental strength of the business.

A robust local economy leading to strong volume growth in core lending was a key contributor to the result. Growth was led by housing volume, which was up 17.8% and reflects the success of the Bank’s focus on home lending.

Bank of New Zealand Managing Director, Peter Thodey, said that a combination of a strong profit result combined with improved customer satisfaction levels pointed to a very balanced performance for the year.

“To be able to deliver on both these fronts is very pleasing, as it means one area has not succeeded at the expense of another,” he said. “Lending in the housing and business sectors is particularly strong and customer satisfaction levels continue to track upwards. With the overall outlook for the economy remaining positive, we are well positioned to take advantage of the new opportunities in the New Zealand market that will arise in the year ahead. Bank of New Zealand is a logical choice for any customers reviewing their banking arrangements following the ANZ takeover of National Bank of New Zealand.”

Mr Thodey said the Bank’s strong performance in housing reinforces the decision taken six months ago to stop distributing home loans through mortgage brokers. Bank of New Zealand is the only major New Zealand bank that does not lend through brokers.

“Our research shows our customers prefer a direct relationship with the Bank rather than working through a third party, and many customers have been coming to us because we do not use brokers. Their endorsement of our position is reflected in our rapidly growing market share for home loans.”

Mr Thodey says General Disclosure Statements of banks (June 2003), show that Bank of New Zealand is one of only two major banks to grow home loan market share over the six months to June.

Over the 12 months to September, its market share for home loans increased from 15.1% to 15.6%, and the Bank captured an average of 19% of overall systems growth each month throughout this period.

Initiatives to improve the customer experience were key drivers during the year, and the Bank undertook a brand programme to re-energise and grow its brand profile in the New Zealand market.

As a result of a range of customer focused activities, Bank of New Zealand’s residential customer satisfaction score in this year’s Auckland University Business School Bank Customer Survey increased from 57% to 71%, moving into second place. It was the only one of the major banks to increase its score this year.

Enhancements to internet banking significantly increased customer satisfaction levels, while improvements to telephone banking saw a reduction in the time required for customers to complete their telephone banking transactions.

“Our overall purpose is growth through excellent relationships and our vision is to become the leading financial services company in New Zealand,” says Peter Thodey. “Results over the past year indicate that we are on track to achieve these goals.”

Bank of New Zealand is a major provider of financial services to New Zealand businesses, and achieved 11.4% growth in lending to this sector, while maintaining excellent credit quality. During the year the Bank reviewed the way it services small businesses and introduced a new channel aimed at this sector, with results to date exceeding expectations. Agribusiness performed strongly, achieving lending growth of 14%, while the AC Nielsen Rural Banking Monitor (August) showed customer satisfaction continues to increase.

In October, BNZ Investment Management won the FundSource Fund Manager of the Year award for the third year in a row.

Growth in underlying profits was driven by an increase in underlying revenues of $97 million or 7%. Increases in other operating income of $46 million or 10%, (driven by an increase in lending volumes), was balanced by a shift of customers to lower cost channels.

The underlying cost to income ratio of 43.9% reflects an improvement of 2.1% - a result of the Bank’s continued commitment to efficiency and process improvements.

Mr Thodey says during the year ahead the Bank expects to see economic growth in New Zealand of 2.5% - 3%, supported by a recovering world economy, improving commodity prices, and a continuing demand for house construction. Firm net migration, a strong labour market and robust business balance sheets will also be contributors.

However he says some risks remain, including weakness in certain export sectors from the New Zealand dollar, and the reaction to a tightening monetary policy from the first half of 2004.

© Scoop Media

Business Headlines | Sci-Tech Headlines


Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>


Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>


Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>


MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>


NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>


Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>