Kiwibank on strong growth path
20/08/2009Kiwibank has announced a normalised after-tax profit of $52.5 million for the 12 months ended 30 June 2009. Chief Executive Sam Knowles described the result as "a clear indication that the bank is on a strong growth path".
The profit for the previous year (2008) was $36.8 million after tax. The declared profit does not include an additional $11.1 million that has resulted from a structural change in the ownership of the bank by New Zealand Post. The profit including the restructuring gain is $63.6 million.
Mr Knowles said in the last year:
- Loans and advances increased 52 per cent from $5.6 billion to $8.5 billion
- Retail deposits increased 39 per cent from $4.8 billion to $6.7 billion
Mr Knowles said the bank had experienced sensational growth in residential home loans, out performing many of the large Australian-owned banks, particularly in the last quarter of 2008. “The lending was extremely high quality and we believe at fair interest rates.”
The credit performance of the loan portfolio remains strong with impaired loans increasing from $4m to $19m over the year. This represents 0.2% of total assets, a lower ratio than those of Kiwibank’s competitors.
Mr Knowles said the deposit market had been very competitive and this had put some pressure on lending rates in the last quarter of the year. “However we have been able to increase our PIE deposits to more than a billion dollars, the largest PIE portfolio of any bank operating in New Zealand.” The PIE tax regime caps tax at 30 per cent, making them very attractive for many customers that pay 38 per cent tax on deposits.
During the year the bank launched its Visa Debit Card attracting what Mr Knowles described as a “massive uptake”.
The business banking division continues to perform well and gain market share for small and medium-sized enterprises. Mr Knowles predicted strong growth in this area over the coming financial year.
In September, Kiwibank successfully raised $60 million through an unsecured subordinated bond issue, the proceeds of which were used to augment its capital base and support further expansion and growth. The issue was over-subscribed with substantial investor interest across a broad range of accounts. The strong demand was a testament to the strength of the bank, particularly given the volatile international financial markets of the time.
For further information:
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Units in the Kiwibank PIE Online Call Fund and the Kiwibank PIE Term Deposit Fund are distributed by Kiwibank Limited and are issued by Kiwibank Investment Management Limited. The Investment Statement for Kiwibank PIE Online Call Fund and the Investment Statement for Kiwibank PIE Term Deposit Fund are available from your local Kiwibank or at www.kiwibank.co.nz. The Visa Debit Card is not available for business banking purposes, companies, trusts or organisations.
Kiwi Group Holdings Limited does not guarantee any securities issued by Kiwibank. New Zealand Post Limited has guaranteed Kiwibank’s payment obligations, including any payment obligation in respect of any deposit made with Kiwibank. The guarantee does not apply to payment obligations where the terms of the obligation expressly provide in writing that the obligation will not have the benefit of the guarantee. This means that the guarantee does not apply to unsecured, subordinated bonds issued by Kiwibank. The guarantee is not secured and its amount is not limited. The guarantee is unconditional and is terminable by New Zealand Post Limited upon three months’ notice to Kiwibank. Any such termination does not affect any existing payment obligations owed under the guarantee at the termination date.
Kiwibank’s Disclosure Statement is available from your local Kiwibank or at www.kiwibank.co.nz.