BNZ extremely happy with 21% profit leap
(1 November 2012 – New Zealand) The Bank of New Zealand (BNZ) turned a strong full-year profit, despite its Australian parent National Australia Bank (NAB) having its profit dented by its United Kingdom operations.
BNZ's profit leapt 21 percent to NZ$741 million (A$586 million) in the full year to September. Parent company National Australia Bank (NAB)'s profit fell by the same percentage margin to A$4.1 billion (NZ$5.2 billion).
In New Zealand, the bank was able to shave 2.1 percent off its operating expenses while boosting revenue 6 percent, to NZ$1.88 billion.
The bank's net interest margin - the premium added to the cost of borrowing money before it is loaned out- rose 9 basis points to 2.39 percent over the year.
BNZ's drive for local deposits helped maintain the margin the bank is enjoying by reducing the reliance on more expensive offshore funding markets. Retail deposits rose more than 10 percent to NZ$34.5 billion, with the bank's market share of deposits increasing to 18.8 percent.
The cost of bad and doubtful debts on the bank's books fell significantly, from NZ$151 million in the last financial year to NZ$98 million.
It's agribusiness share rose from 20.8 percent to 21.9 percent, and the bank said the sector continued to be well supported by ongoing demand for protein in emerging markets.
BNZ chief executive Andrew Thorburn said in a statement that the strong profit was not just a result of prudent cost management and the focus on local funding.
'It's the strength of our bank which allows BNZ to continue to give confidence to our depositors and rating agencies which in turn supports our balance sheet strength and funding capability.'
Thorburn said BNZ employed more than 5000 New Zealanders, paid over NZ$700 million in salaries and to local suppliers, and more than NZ$200 million in taxes. He also pointed out that it was the first carbon-neutral bank in New Zealand, and the largest Fair Trade business in the country.
In New Zealand, the bank was able to shave 2.1 percent off its operating expenses while boosting revenue 6 percent, to NZ$1.88 billion.
The bank's net interest margin - the premium added to the cost of borrowing money before it is loaned out- rose 9 basis points to 2.39 percent over the year.
BNZ's drive for local deposits helped maintain the margin the bank is enjoying by reducing the reliance on more expensive offshore funding markets. Retail deposits rose more than 10 percent to NZ$34.5 billion, with the bank's market share of deposits increasing to 18.8 percent.
The cost of bad and doubtful debts on the bank's books fell significantly, from NZ$151 million in the last financial year to NZ$98 million.
It's agribusiness share rose from 20.8 percent to 21.9 percent, and the bank said the sector continued to be well supported by ongoing demand for protein in emerging markets.
BNZ chief executive Andrew Thorburn said in a statement that the strong profit was not just a result of prudent cost management and the focus on local funding.
'It's the strength of our bank which allows BNZ to continue to give confidence to our depositors and rating agencies which in turn supports our balance sheet strength and funding capability.'
Thorburn said BNZ employed more than 5000 New Zealanders, paid over NZ$700 million in salaries and to local suppliers, and more than NZ$200 million in taxes. He also pointed out that it was the first carbon-neutral bank in New Zealand, and the largest Fair Trade business in the country.
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