BNZ profit dented by crisis

AUCKLAND: The BNZ’s profit has been knocked sharply lower by the Covid19 pandemic, but it is confident the worst is behind it.

The bank, owned by Australia’s NAB, reported a net profit for the year ended September of $762 million compared with last year’s $1.02 billion, as its margins were squeezed by low interest rates and rising costs, and it set aside $300 million for bad and doubtful debts nearly three times the level of the year before.

Chief executive Angie Mentis said the bank and the economy had come through the pandemic in better shape than might have been thought.

‘‘When we look at our customer base, we helped about 30,000 with Covid support worth about $10 billion and about 70% of those are now returning to preCovid, and we’re really pleased that our customers are showing strength.’’

She was confident the level of bad and doubtful debts was at its peak and that the final cost might come in below the $300 million set aside, although she cautioned that the pressure on the tourism sector during the summer holiday season might be significant.

Ms Mentis said the BNZ had just had a record month of mortgage lending and keeping a ‘‘watchful eye’’ on the sector, but she stopped short of saying it was becoming overheated and needing action by the Reserve Bank, such as the reimposition of the loan to value ratios (LVR) lending controls.

Economic recovery would be driven by the improvement in the fortunes of small and medium sized businesses (SMEs), which was one reason the BNZ had loaned $320 million to more than 400 firms through the governmentbacked business finance guarantee scheme, the most of any retail bank, she said. — RNZ