BNZ saw an 11 percent rise in operating expenses in the last half. Photo: RNZ / Nate McKinnon
The Bank of New Zealand is weathering the slowing economy, but is feeling the squeeze from higher costs and reduced margins.
Key numbers for the six months ended March compared with a year ago:
- Net profit $762m vs $805m
- Net interest income $1.46b vs $1.46b
- Loans $104b vs $101b
- Deposits $81.8b vs $79b
- Impairments $71m vs $79m
- Net interest margin 2.37 pct vs 2.45 pct
BNZ chief executive Dan Huggins said the result was "resilient" in the current subdued economic environment.
"High interest rates and cost of living pressures continue to impact business and household finances."
The BNZ increased its lending and its deposits, and the net interest income - the difference between what it paid for funds and what it charged borrowers - was flat on a year ago.
The net interest margin - a measure of bank profitability - fell eight basis points on a year ago, while the amount set aside for bad and doubtful debts fell 10 percent to $71 million.
The major difference was an 11 percent rise in its operating expenses, which Huggins said was investment in technology and anti-scam measures.
"We continue to invest heavily in protection measures to help keep our customers safer online, while also delivering digital solutions designed to free up time in their busy lives," Huggins said.
The economic and business outlook would be dictated by slowing inflation and easing interest rates, he said.
"While easing inflation is encouraging, it is expected to remain outside of the Reserve Bank's target band until the end of year. Economic conditions are likely to remain challenging until there is a material reduction in interest rates."