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


Kiwibank profit halves on bad debts

Kiwibank profit halves on bad debts

by Paul McBeth

Aug. 25 (BusinessDesk) - State-owned lender Kiwibank Ltd. has posted its worst profit since 2006 when its interest income was almost a quarter of today’s levels. Kiwibank posted a net profit of $21.2 million in the 12 months ended June 30, less than half last year’s $45.8 million, and the worst since 2006.

The weaker result came from a $79 million impairment charge on bad loans, more than four times the $17.9 million booked in 2010, and adding a further $22.2 million in the last three months of the year.

Still, interest income climbed 28% to $720.4 million as the lender increased its loan book 10% to $11.5 billion and attracted 14% more retail deposits to $7.9 billion.

That goes against the trend with privately-owned Westpac Banking Corp., ANZ National Bank Ltd. and Bank of New Zealand all boosting profits on fewer bad debts.

Provisioning for bad debts rose to $87.1 million from $19.5 million, though the bank managed to cut past due assets to $184.8 million from $217.9 million.

Chief executive Paul Brock, who took over at the lender in September, said most of the provisioning was regarded as ‘one-offs’ and left room for upside next year.

“The global financial crisis compounded by the earthquake has made things tough, but the bank is in strong shape and has weathered the storm,” he said.

In March, Michael Cullen, the chairman of Kiwibank parent NZ Post, told a Parliamentary select committee the lender was operating a high-cost model and will look to cut costs in anticipation of slower growth for the rest of the financial year.

(BusinessDesk) 12:36:59

© Scoop Media

Business Headlines | Sci-Tech Headlines


Auckland Airport: North American Touch Downs Make AA Most Connected In Australasia
The return of American Airlines, the world’s largest airline, announced today has cemented Auckland Airport’s title as the Australasian airport with the most non-stop connections to the United States and Canada... More>>

Reserve Bank: Monetary Conditions Tighten By More And Sooner

The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 2.0 percent. The Committee agreed it remains appropriate to continue to tighten monetary conditions at pace to maintain price stability... More>>

The Download Weekly: Vodafone FibreX back in court

Vodafone and the Commerce Commission head back to court over FibreX in a week the TCF issues broadband marketing codes that should avoid similar problems in the future... More>>

Kiwibank: Savers To Benefit From Higher Returns Following OCR Rise

Following market movements Kiwibank is pleased to increase the interest rate and rates of return on its savings accounts... More>>

Fonterra: Provides 2022/23 Opening Forecast Farmgate Milk Price & Business Performance Update
Fonterra today announced its 2022/23 opening forecast Farmgate Milk Price and provided an update on its third-quarter performance... More>>

Stats: Quiet Start For Retail In 2022
The volume of retail sales was relatively unchanged in the March 2022 quarter, following a strong increase in the December 2021 quarter, Stats NZ said today... More>>