NZ banks are rising up
(8 February 2010 – New Zealand) New Zealand’s five major banks have emerged from the gloom of the recession, according to PricewaterhouseCoopers’ latest edition of its New Zealand Banking Perspectives.
The top banks, Westpac, ASB, ANZ National, BNZ and Kiwibank, have maintained core earnings and showed measured balance sheet growth, despite a trebling in bad debt expenses and the accruing for costs associated with the conduit tax disputes with the Inland Revenue.
The banks performance has been a story of two halves; in the first half of the 2009 financial year New Zealand banks preformed credibly with a modest decline of 1.8 percent in their aggregate statutory profits, compared with six months earlier.
However, the second half of the year was a different story. The aggregated results of the major banks reported a statutory loss of NZ$1.4 billion (A$1.6 million) compared to a statutory profit of NZ$1.3 billion for six months earlier.
The combined 2009 full year results for the major banks represented a statutory loss of NZ$76 million, compared to an overall statutory profit of NZ$2,947 million reported in 2008.
PricewaterhouseCoopers Financial Services Partner, Sam Shuttleworth, said that the last six months will be remembered for the large provisions recognised in respect of the conduit tax cases between various banks and the Inland Revenue, as well as public attention on residential mortgage interest rates.
However, it should also be remembered for the resilient core earnings and sound capital bases the banks have maintained through careful efforts and well considered governance during a period of economic turmoil whilst combating escalating bad debt charges, Mr Shuttleworth added.
Mr Shuttleworth also said that New Zealand banks are now more self-sufficient in funding their own business. During the economic crisis, the major Australian banks, which included their New Zealand subsidiaries, appeared in the Global Finance ‘World’s 50 Safest Banks’ list.
Strong Australian banks were able to support their New Zealand subsidiaries which helped shelter the banks from the worst of the crisis fallout.
The banks performance has been a story of two halves; in the first half of the 2009 financial year New Zealand banks preformed credibly with a modest decline of 1.8 percent in their aggregate statutory profits, compared with six months earlier.
However, the second half of the year was a different story. The aggregated results of the major banks reported a statutory loss of NZ$1.4 billion (A$1.6 million) compared to a statutory profit of NZ$1.3 billion for six months earlier.
The combined 2009 full year results for the major banks represented a statutory loss of NZ$76 million, compared to an overall statutory profit of NZ$2,947 million reported in 2008.
PricewaterhouseCoopers Financial Services Partner, Sam Shuttleworth, said that the last six months will be remembered for the large provisions recognised in respect of the conduit tax cases between various banks and the Inland Revenue, as well as public attention on residential mortgage interest rates.
However, it should also be remembered for the resilient core earnings and sound capital bases the banks have maintained through careful efforts and well considered governance during a period of economic turmoil whilst combating escalating bad debt charges, Mr Shuttleworth added.
Mr Shuttleworth also said that New Zealand banks are now more self-sufficient in funding their own business. During the economic crisis, the major Australian banks, which included their New Zealand subsidiaries, appeared in the Global Finance ‘World’s 50 Safest Banks’ list.
Strong Australian banks were able to support their New Zealand subsidiaries which helped shelter the banks from the worst of the crisis fallout.
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