Rise in earnings driven by strong home loan growth, says lender
Bank of New Zealand (BNZ) has achieved a solid financial result for the first half of 2019, with the bulk of the revenue supported by strong home loan growth.
BNZ reported a 9% rise in operating revenue to $1.278 billion for the six months ending March 31. Another highlight for the bank was a 12.2% increase in statutory net profit to $550 million. The increase was impacted by higher cash earning in BNZ Banking Group, the gain on the sale of BNZ’s 25% shareholding in Paymark and unfavourable mark to market movements on offshore debt instruments.
“The first six months have been all about enabling our people to deliver the basics brilliantly for BNZ customers, backing our regions, and supporting at-risk communities across New Zealand,” BNZ chief executive officer Angie Mentis said. “We have purposefully realigned the business to deliver improved customer outcomes, and we’re encouraged by our progress to date and excited about the future.”
For the first half of 2019, BNZ increased its share of the housing loan market by 1.2x the market growth rate. The bank said this allowed more than 7,500 New Zealanders to realise their home ownership goals, with 2,500 of those being first home buyers.
Read more: BNZ to offer new shared ownership loan scheme
“Our housing loan growth was particularly pleasing as we know home ownership plays a key role in New Zealanders’ sense of on-going financial wellbeing and people are looking to BNZ to help take this important step,” Mentis added. “BNZ is also expanding the options available for first home buyers to get into the market with the introduction of a shared-ownership pilot programme.”
Meanwhile, NAB NZ banking reporting segment saw a 7.7% increase in cash earnings to $532 million. Its net operating income increased 5.5% to $1.258 billion, driven by strong volume growth in housing, business lending and deposits, and supported by improved net interest margin. Meanwhile, gross loans and acceptances increased by 6.4% to $84.9 billion driven by housing and business lending.
NAB NZ Banking Reporting segment comprises the consumer, wealth, business, agribusiness, corporate, insurance and market sales operations in New Zealand, operating under the BNZ brand.
