Kiwibank full year results for the year ended 30 June 2021

Key features of the results:

  • Net profit after tax of $126m
  • Assisted more Kiwi than ever before with their home ownership aspirations
  • Enabled businesses to grow with a year of record lending
  • Continued to support Kiwi home loan and business customers during COVID-19
  • Achieved B Corp™ certification - an internationally recognised, third-party verified, trust mark for businesses that demonstrate leadership and commitment to using profits and growth to have a positive impact for employees, communities, customers and the environment.

Kiwibank today announced an improved performance for the 12 months to 30 June 2021 recording a net profit after tax of $126m, up strongly from the COVID-19 impacted result of $57m for the prior corresponding period.

The New Zealand-owned bank grew overall net lending by $3.0b (up 13%), with residential mortgage lending growth of $2.2b (up 11%) and growth in business lending of $0.8b (up 51%).

Chief Executive Steve Jurkovich said a combination of strong lending and deposit growth, cost discipline, benefits from technology and digital investments, as well as the anticipated release of bad debt provisioning for COVID-19, all contributed to the positive result.

“I’m proud of the progress Kiwibank continues to make as we strive to deliver on our goal to become the bank of choice for even more Kiwi - whether that’s getting into a new home, investing in their businesses, or bringing change to New Zealand through our purpose-led approach.”

Mr Jurkovich said the bank was working hard to support any customers impacted by the latest Level 4 lockdown and acknowledged the anxiety and uncertainty that many customers were likely to be feeling.

“We’ve moved quickly to update information on our website. We urge customers worried about their financial situation to get in touch so we can work through the options available.”

Assisting more Kiwi into homes

Mr Jurkovich said the bank had assisted more Kiwi with their home ownership aspirations than ever before.

“The strong housing market has played a significant role, as well as our consistently competitive and market-leading interest rates. In addition, the focus on growing our frontline banking expertise and starting to expand our reach via advisers, demonstrates our changing business and the shifts we are making to better meet customer preferences, as well as how we are showing up to help more Kiwi homeowners in a variety of ways.”

Enabling businesses to grow with a year of record lending

Mr Jurkovich said the record growth in business lending of $0.8b was off a relatively small base compared to competitors and was driven by customer confidence in Kiwibank’s ability to deliver what they needed.

“Many businesses have had to adapt to the ever-changing environment. While it’s been a challenging time for businesses, many have had strong performances.

“Kiwibank has been consistent in its support and has focussed its efforts on maintaining a clear understanding of customer needs and making sure we have the expertise and capabilities to have a meaningful impact.

“I’m really pleased with our progress this year, but it’s just the start. Our focus is to support even more Kiwi businesses to grow, invest or diversify in the year ahead.”

Supporting customers through COVID-19

During and after the last COVID-19 event Kiwibank provided support to over 6,000 personal and 2,000 business customers. The bank also approved close to its allocation of Business Finance Guarantee Scheme loans supporting nearly 180 business with $120m in term loans. Mr Jurkovich said the scheme was successful in that it helped customers adjust to a post lockdown environment.

“Following this latest outbreak, we have moved quickly again to ensure we have support packages and other measures in place. With the situation changing day-to-day we’ll continue to monitor and respond as necessary.

“As always, if you are a customer experiencing financial difficulty get in contact with us sooner rather than later. For any customers facing hardship we’ll work with them to identify the best option for their circumstance.”

Certified B Corporation™ – Doing good for New Zealand

The bank’s B Corp certification required it to be measured against the highest global standards of social and environmental performance, transparency, and accountability.

“We are incredibly proud of this achievement which reflects our commitment to be a purpose-led organisation. Customers are increasingly choosing businesses that align with their values – ones that have a positive impact on people’s lives and the environment. B Corp will give our customers confidence Kiwibank is doing good, acting responsibly, and considering future generations through its products, practices, and profits,” said Mr Jurkovich.

He highlighted several key achievements over the financial year that demonstrated the bank’s strong connections to New Zealand that were making Kiwi better off, including:

  • Achieved B Corp™ certification
  • Reduced organisational carbon emissions by 53.2% from baseline year (2018)
  • Introduced a gambling block option for customers
  • Moved Auckland corporate office to Te Kupenga, a 6 Green Star building in the Wynyard Quarter
  • Commitment made to Te Ao Māori with launch of our Rautaki (Māori strategy)
  • Re-accreditation of both Rainbow Tick and Gender Tick
  • Continued our commitment to the community with strategic partnerships including Banqer, New Zealander of the Year, Ngā Tāngata Microfinance Trust, DOC’s Conservation Dogs Programme, Digital Inclusion Alliance Aotearoa, Emirates Team New Zealand, Ākina, Mentemia and Manaaki.

Continued investment in people and technology to deliver on our strategy

Mr Jurkovich said Kiwibank continued to invest heavily in its people and technology with the goal of becoming the bank of choice for even more customers at the moments that matter for them.

“Our customers are demanding faster, safer, and more convenient options. That means we need to offer simple, easy to use products that meet customer needs, and we need to make sure they have access to our experts and expertise when it matters most.

“Customers are already benefiting from improved processes resulting in quicker decisions for home lending, a reduction in call-wait times; and we’ve introduced a digital ID solution for new credit card applications and those wanting to join the bank,” he said.

“Looking forward, we recognise that we all have to adapt to operating in an uncertain environment. As a bank we must remain nimble and flexible so we can continue to deliver on our purpose of making Kiwi better off,” Mr Jurkovich said.

Ends.

Kiwibank Disclosure Statement

Income statement for the year ended 30 June 2021

Dollars in millions

Year ended

30/06/21

Year ended

30/06/20

Interest income

761

894

Interest expense

(233)

(439)

Net interest income

528

455

Net gains on financial instruments

8

13

Other operating income

41

65

Total operating income

577

533

Operating expenses

(422)

(408)

Profit before credit impairment and taxation

155

125

Credit impairment reversals/(losses)

19

(51)

Profit before taxation

174

74

Income tax expense

(48)

(17)

Profit after taxation

126

57