BNZ profit up 7.4% on back of Controversial Nadia Lim remarks spark bans mortgage lending, low debts
AUCKLAND: Another major retail bank has reported a solid lift in profits on the back of growth in mortgage lending and low bad debts and costs, and is confident borrowers can cope with a slower housing market and higher interest rates.
The Bank of New Zealand’s net profit for the six months ended March rose 7.4% to $709 million from $660 million during the previous corresponding period, while the cash profit, which strips out oneoff items, rose 7.1% to $675 million.
BNZ chief executive Dan Huggins said the result reflected underlying economic strength and the bank’s own attention to quality lending.
‘‘New Zealand’s resilience and success can be seen in our results.’’
The bank, owned by Australia’s NAB, had an 8% lift in lending to $97.8 billion, driven by mortgage demand, while deposits rose 9.1% to $80.4 billion, and its cost of doing business also fell.
Mr Huggins said a cooling housing market and tougher lending rules were starting to show through in a reduction in credit demand, but the BNZ had been ‘‘stress testing’’ borrowers and their ability to cope with rising rates.
‘‘We have been lending responsibly to customers and they can continue to afford their loans moving forward . . . We’re currently testing borrowers at 6.75%, but that’s under review and I’d expect that’s going to move in the next week or so.
‘‘We’re comfortable that customers will be able to afford their rates, but notwithstanding that there will be some customers who will need to tighten up their belts and manage their expenses quite carefully,’’ Mr Huggins said.
The outlook for the BNZ and the broader economy was positive although growth would be more restrained by a broad range of factors, he said.
‘‘The economy has done well, businesses and consumers have been resilient, but there are challenges that need to be navigated — global uncertainties, inflation, supply chains and a transition to living with Covid.’’
The sector was likely to remain competitive as banks vied to hold and build market share, he said.
Earlier this week the country’s biggest bank, ANZ, posted a record halfyear result. Westpac is due to report on Monday. — RNZ
WELLINGTON: A storm is brewing in investment circles, blacklistings having been announced over comments made by the chief executive of chemical company DGL, Simon Henry, about My Food Bag cofounder Nadia Lim.
Mr Henry made derogatory comments about Ms Lim, her appearance and her role in the promotion of the food company’s share float last year. He described Ms Lim as a ‘‘little bit of Eurasian fluff’’ and claimed a photo of her showing cleavage was used in the My Food Bag prospectus to sell shares.
The two companies floated and listed on the NZX about the same time, and Mr Henry made the comments when comparing their relative performances since then.
The comments have been broadly criticised, and investment managers Kiwi Wealth and Simplicity have blacklisted DGL from their funds.
Mr Henry was not available for comment.
New Zealand Shareholders’ Association chief executive Oliver Mander said Mr Henry needed to realise ‘‘it’s not the 1970s anymore’’ and the comments were at odds with how company executives should think and act, and contrary to established diversity and governance practices.
‘‘The views of Mr Henry in relation to Nadia Lim send a false message when it comes to entrepreneurship and corporate development in New Zealand,’’ Mr Mander said.
‘‘We welcome all forms of thought, diversity and experience on the boards of listed entities as improving governance and decisionmaking quality.’’
The comments suggesting personal appearance had been used to try to sell the My Food Bag offer were an insult not just to Ms Lim but also to investors, he said.
‘‘We consider it improbable and insulting to the capabilities of New Zealand investors that any investor would make a significant financial decision based on a picture of a company’s founder.’’
Mr Henry also seemed to be at odds with DGL’s own policies, which ‘‘support the commitment of the company and its controlled entities to an inclusive workplace that embraces and values diversity’’, Mr Mander said.
Kiwi Wealth chief executive Rhiannon McKinnon said while Mr Henry remained chief executive of DGL and Kiwi Wealth’s concerns about the issue remained Kiwi Wealth would be unlikely to consider adding DGL to its investment portfolio.
‘‘We were appalled like many others by the tone, the misogyny and the racism in that comment, and it made us look again at DGL in terms of red flags around their governance processes, around ESG [environmental, social and governance factors], and caused us to take it to our responsible investment committee . . . . on the basis of the governance of the company,’’ Mr McKinnon said.
‘‘It’s totally inappropriate for someone at such a senior level to be making comments . . . in a public forum . . . [and] is something that seems reckless at best.’’
The comments were particularly concerning given Mr Henry was the majority shareholder of DGL, with 57% of its shares, as well as the company’s founder, chief executive and executive director — and so also on the company’s board, Mr McKinnon said.
‘‘We thought that a company with this . . . type of governance would have maybe had more controls on his ability to say those comments in public, but also [it is a] concern for the safety and wellbeing of any female staff that he might have within the company.’’ — RNZ