Savings shelter banks from global uncertainty
(3 September 2012 – New Zealand) A large boost in savings by Kiwis is expected to help banks shelter from funding shocks with global uncertainty continuing according to PricewaterhouseCoopers (PwC).
PwC’s latest New Zealand Banking Perspectives report shows New Zealand's five big banks boosted their combined first-half net profit 5 percent to NZ$1.77 billion, (A$1.37 billion) compared with the second half of the 2011 financial year.
Combined customer deposits at the banks - ANZ National, ASB, Bank of New Zealand, Kiwibank and Westpac - grew 6.9 percent or NZ$12.2 billion in the period - a level of growth not seen for some years.
Banks had increased their New Zealand-sourced funding by 3.7 percent or NZ$7.3 billion during the period.
The report shows all five banks combined pushed up net profit despite a very slight 0.6 percent dip in pre-tax profit to NZ$2.44 billion.
Net interest income rose a slight 1 percent or NZ$43 million to NZ$3.67 billion - thanks to a reduction in funding costs outweighing a reduction in loans income.
Bad debt expenses fell 27 percent to NZ$277 million, with household debt levels close to pre-global financial crisis levels.
That was outbalanced by a NZ$89 million fall in other operating income and a NZ$70 million rise in operating expenses.
Net interest margin was 2.4 percent for the period, up from 2.31 percent. Both household and corporate lending was up, the former by NZ$1.8 billion to NZ$177.6 billion and the latter by NZ$1 billion to NZ$104.3 billion - suggesting a recovery in the local economy.
Combined customer deposits at the banks - ANZ National, ASB, Bank of New Zealand, Kiwibank and Westpac - grew 6.9 percent or NZ$12.2 billion in the period - a level of growth not seen for some years.
Banks had increased their New Zealand-sourced funding by 3.7 percent or NZ$7.3 billion during the period.
The report shows all five banks combined pushed up net profit despite a very slight 0.6 percent dip in pre-tax profit to NZ$2.44 billion.
Net interest income rose a slight 1 percent or NZ$43 million to NZ$3.67 billion - thanks to a reduction in funding costs outweighing a reduction in loans income.
Bad debt expenses fell 27 percent to NZ$277 million, with household debt levels close to pre-global financial crisis levels.
That was outbalanced by a NZ$89 million fall in other operating income and a NZ$70 million rise in operating expenses.
Net interest margin was 2.4 percent for the period, up from 2.31 percent. Both household and corporate lending was up, the former by NZ$1.8 billion to NZ$177.6 billion and the latter by NZ$1 billion to NZ$104.3 billion - suggesting a recovery in the local economy.
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