BNZ outperforms Aussie parent
BNZ’S chief executive Angie Mentis says she’s ‘‘absolutely intent’’ on disrupting the businesses of loan sharks and mobile traders.
The bank has announced a profit of $1.02 billion for the financial year, down $7 million on the year before because of one-off expenses. Without those one-off movements, its profit would have lifted $23m.
It did much better than its parent company in Australia. The overall group result was A$5.1b (NZ$5.5B), which was a drop of 10.6 per cent, year-on-year. That result included after-tax charges of A$1.1b for customer compensation, which the bank had previously disclosed.
As part of the announcement, BNZ marked five years of its partnership with Good Shepherd to provide community finance. It said it had helped more than 1900 families get access to $5.16m in loans.
It is also now offering two The Good Shop mobile trucks in Manurewa and Porirua offering no and low-interest loans, as a counterpart to traders offering punitive credit contracts.
Mentis said it was an area that ‘‘had to stop’’.
She said the bank was operating in a challenging environment, as regulatory scrutiny increased in Australia and New Zealand.
Both regulator and customer expectations were increasing, and she said it forced the bank to think about what it was trying to do and whether it was delivering the best outcomes to customers.
The Reserve Bank is expected to reveal the outcome of its consultation on proposals for higher capital requirements for banks next month.
Mentis said the BNZ had constructive dialogue with the central bank. It was already tilting more towards consumer and SME lending and that was the right strategy in a capital-constrained environment, she said. ‘‘BNZ’S focus on helping New Zealanders be good with money so they can do great things with it has seen growth in lending across business and consumer portfolios.’’
BNZ helped more than 5000 New Zealanders into their first home, up 25 per cent on last year, and gave loans to more than 16,000 small and medium businesses.
‘‘Last year, we made available $10b of lending over five years to small and medium enterprises outside of New Zealand’s main centres and we know it is being put to good use across the country.’’
Its net interest margin, the difference between what it charges people for loans and what it pays depositors, declined by two basis points to 2.25 per cent.
In addition to committing to no regional branch closures until at least 2022, BNZ launched its first mobile branch covering Foxton, Martin, O¯ taki and Pahiatua in the Manawatuwhanganui region.
During the year, BNZ cut 36 products from its range, removed overseas ATM fees and helped more customers to be digital first, reducing 2.8 million pieces of paper from its processes.