Photo: Kiwibank
Kiwibank has posted a record full year profit on the back of increased lending as it grew faster than the main Australian owned rivals.
Key numbers for the year ended June compared with a year ago:
- Net profit $202m vs $175m
- Net interest income $824m vs $794m
- Lending $32.4b vs $29.7b
- Deposit $28.2b vs $ 25.8b
- Net interest margin 2.38 pct vs 2.48 pct
- Credit losses $24m vs $37m
Steve Jurkovich Photo: Kiwibank
Chief executive Steve Jurkovich said home and business lending grew 9 percent, which was about three times faster than the broader industry, while its deposits had grown about the same level.
He said the performance reflected a clear preference among many consumers for a New Zealand owned bank, whose earnings and profits were retained in the country.
"We know there's plenty of choice out there, but today's result shows once again that we are fulfilling our role as a disruptor, more Kiwi are choosing us, and momentum is on our side."
Jurkovich said borrowers and households had been under immense pressure from the high cost of living, but had "really knuckled down" to concentrate on paying mortgages and other essential costs. The level of bad and doubtful loans was moving back to normal levels.
He expected a general improvement in business and increased borrowing demand as interest rates fell and the economy picked up.
Role as a maverick
The Commerce Commission banking report highlighted the position of Kiwibank to be able to challenge the dominance of the major four Australian owned banks if it was given more capital.
Jurkovich said Kiwibank was able to be the maverick and disruptor to the industry as outlined by the commission's report, and decisions about more capital, how it was raised, and whether there should be limits or a ban on any foreign involvement were matters for the government as owners.
However, he said expectations should be realistic and it could be the best part of a decade before Kiwibank could grow to a size to rival the majors.
"Outpacing yourself and growing too fast can cause banks problems, which is one thing to watch and secondly, being flooded with a whole pile of capital is not really all that useful. What's useful is to have a steady flow of capital over time so that we can outgrow the market."