Kiwibank delivers strong half year performance, doubles investment in strategic transformation


Kiwibank result overview for the six months to 31 December 2021

  • NPAT $64m, up 16% from $55m in HY21
  • NPBT $89m, up 14% from $78m in HY21
  • Revenue $328m, up 19% from $276m in HY21
  • Cost to income falls to 70.7%, from 71.7% in HY21
  • Net interest margin 2.04%, from 1.94% in HY21
  • Lending growth $1.9b, up 20% from $1.6b in HY21
  • Net deposit growth $1.4b, up 10% from $1.3b HY21
  • Investment in technology remains a strategic priority to improve scalability for future growth, with $50m spent during the period, broadly double the investment in the prior year

Kiwibank today announced a net profit after tax of $64m for the six months to 31 December 2021, up 16% on the same time last year.

Chief Executive Steve Jurkovich said the bank recorded improvements across all key internal financial metrics and outperformed the market in home loan and business banking growth, meaning it grew at a faster rate than the banking industry as a whole.

“This strong result is due to our strategy which balances purpose and performance, and is driving more savers, homeowners and businesses to choose to bank with the largest New Zealand-owned bank,” Mr Jurkovich said.

“Total lending growth of $1.9b for the half (up 20% on the prior period) was driven by the strong housing market and solid demand, with above market growth from our continued focus on the expansion of adviser channels.

“Business banking growth was flat on the prior half, but well above the rest of the market. This was due to a refreshed strategy focused on key customer segments and high demand from the business sector to work with a trusted New Zealand brand.

“At the same time, we continued to make good progress on initiatives to improve customer experience, while doing everything we can to ensure we strengthen the fundamentals of our products and customer service with a determination to be safe, reliable, and available.”

Transformation update

Mr Jurkovich said the half year result was even more pleasing given it was delivered at the same time as the bank nearly doubled its investment in the strategic transformation required to build a better bank for the future.

“2022 is shaping up to be a hugely exciting and pivotal year as we progress the capabilities needed across people, process, and technology. This will enable us to build a solid foundation that helps us create more consistent, reliable, and intuitive experiences for our people and our customers.

“I’m really proud of our team at Kiwibank who continue to focus on performing, transforming, and delivering on our purpose of Kiwi making Kiwi better off.”

Mr Jurkovich confirmed that Kiwibank was partnering with the world’s leading-edge fintechs and providers to support the delivery of its transformation, including:

  • Thought Machine for core banking platform
  • ACI Worldwide for real-time digital payments
  • nCino for the bank’s lending origination platform

“The transformation being undertaken and the local and global partners we’re working with makes Kiwibank one of the most attractive organisations to work for in Aotearoa today,” he said.

Ongoing disruption caused by COVID-19

Mr Jurkovich said the bank was well positioned to manage the ongoing uncertainty and disruption caused by COVID-19 and that it had plans in place to support the health and safety of its people and customers.

“We haven’t seen material adverse impacts from the lockdowns or the pandemic to date, but we continue to monitor the situation closely. We are very aware that many customers and their businesses are fatigued from the multi-year effort they have put in and they are doing all they can to navigate COVID and the uncertainties it brings.”

Housing market outlook

Mr Jurkovich said after a year of strong growth, the bank was forecasting a period of consolidation in the housing market and acknowledged the possibility of modest price falls.

“A number of factors are at play including expected increases to the Official Cash Rate, tighter lending restrictions (including LVRs, DTIs and CCCFA), and an increased supply of new homes.

“We remain committed to supporting Kiwi to get into homes while ensuring they have the means to meet their repayment obligations. We’ll be working with customers to understand what this looks like and the options available to them in this changing environment,” he said.


Download Kiwibank's Disclosure Statement - December 2021

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1 In the 30 June 2021 audited financial statements, the Banking Group renamed ‘Net fee and other income’ to ‘Other operating income’, and reclassified certain operating expenses to direct fee expenses or to net amounts against gross revenue within ‘Other operating income’. Amounts for the six months ended 31 December 2020 have been reclassified as follows to align with the current period’s presentation: ‘Operating expenses’ and ‘Other operating income’ have decreased by $11m.