media briefing financial results – 6 months ended 31 december 2012
TRANSCRIPT
MEDIA BRIEFING
Financial Results – 6 months ended 31 December 2012
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Topics Covered
Key Achievements
Profit Performance
Balance Sheet Growth
Key Ratios
Capital Adequacy
Credit Quality
Credit Rating
Business Banking
Kiwi Group Holdings
Awards
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Key achievements
Profit after tax of $58m for the 6 months ended 31 December 2012, a 53% increase on profit for the 6 months to 31 December 2011 of $38m
Continued growth in balance sheet since December 2011:
Lending increased 6% from $12.1bn to $12.8bn
Customer deposits increased 5% from $11.7bn to $12.3bn
Continued customer growth
Kiwibank successfully issued a $150m subordinated bond into the domestic market. Despite being the first offer in New Zealand under the new Basel III capital rules, the bond was heavily over subscribed reflecting investor confidence in the Bank
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Financial Performance – Profit & Loss
Continued growth in profitability Aided by favourable exit of impaired loans in the 6 months
Dollars in millions31 Dec
201231 Dec
2011 % growth
Net interest income 140 123
Other income 87 81
Total operating revenue 227 204 11%
Total expenses (147) (151) (3%)
Profit before tax 80 53 51%
Income tax expense (22) (15)
Profit after tax 58 38 53%
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Financial Performance-Historical Summary
Dollars in millions 31 Dec 2012 31 Dec 2011 31 Dec 2010 31 Dec 2009 31 Dec 2008
Financial performance
Interest income 400 381 348 268 362
Interest expense (260) (258) (259) (202) (283)
Net interest income 140 123 89 66 79
Other income 87 81 80 88 75
Total operating revenue 227 204 169 154 154
Operating expenses (147) (133) (118) (111) (110)
Impairment allowances - (18) (31) (10) (6)
Net profit before taxation 80 53 20 33 38
Income tax expense (22) (15) (6) (9) (12)
Net profit after taxation 58 38 14 24 26
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Financial Performance-Balance sheet
Strong loan growth continues in competitive market Matched by demand for Kiwibank’s retail deposit products
Dollars in millions31 Dec
201231 Dec
2011 % growthAssetsLoans and advances 12,842 12,068 6%Wholesale & other assets 2,390 2,318 Total assets 15,232 14,386 6%
Financed by:LiabilitiesCustomer deposits 12,286 11,716 5%Securities issued & other liabilities 2,137 1,971 Total Liabilities 14,423 13,687 5%
Shareholder's equity 809 699 16%Total liabilities and shareholder's equity 15,232 14,386
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Financial Performance (key ratios)
Ratios in percentage terms 31 Dec
201231 Dec
2011
Profitability measures
Net interest inc./average interest bearing assets 1.91% 1.74%
Net profit after tax/avg shareholder's funds 15.4% 11.6%
Efficiency measures
Operating expenses/total income 64.5% 65.1%
Operating expenses/average total assets 2.0% 1.9%
Capital ratios
Total capital ratio (Pillar 1) 13.5% 12.0%
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Financial Performance-Capital Adequacy
Total Capital ratio under Basel II is 13.5% compared to RBNZ’s minimum regulatory capital ratio of 8%
Total capital increased by $156m to $980m, a 19% increase from 31 December 2011
$150m subordinated bond issue in December 2012, heavily oversubscribed
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Credit Quality (Impaired Assets)
The table shows total impaired assets as a % of gross loans and advances from Disclosure Statements dated 30 September 2012. Kiwibank remains favourably placed against other banks
Continued improvement in the quality of Kiwibank’s loan portfolio
Impaired assets of $56m at 31 December 2012 include all assets where interest charges have been suspended and a specific provision has been raised. Down from $100m at 31 December 2011.
Source: 30 September 2012 Disclosure Statements.
31 December 2012 not yet available.
Bank
31 December
2012
30 September
2012
Kiwibank 0.43% 0.55%ASB 0.71%BNZ 0.77%Westpac 1.43%ANZ 1.55%
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Kiwibank credit rating
In October 2012, Standard & Poor’s lowered Kiwibank’s credit rating one point to A+ (outlook stable). This mirrored the rating change to the Bank’s owner, New Zealand Post.
The rating is among the highest of the trading banks operating throughout the world.
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Kiwibank business banking
Business Banking: A growth sector We serve business and all their related personal needs
Target market is New Zealand SME’s. They represent over 90% of Kiwi business (Source: NZ Statistics, Feb 2013) and are core to our economy.
Today we have 33,000 businesses and have grown by 8% over the last year
There are 115 Kiwibank business specialists nationwide
We have a full suite of banking services including specialised business products
Our current and future focus is to enable our customers to spend more time on their business by making their banking easy.
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Kiwi Group Holdings
Kiwibank is owned by Kiwi Group Holdings, which in turn is fully owned by New Zealand Post. Kiwibank’s sister companies in Kiwi Group Holdings are New Zealand Home Loans (NZHL), Kiwi Insurance, and Gareth Morgan Investments (GMI).
As at 31 December 2012:
NZHL had signed up $1 billion in home lending for the year
Group KiwiSaver (GMI and Kiwibank) had circa $1 billion in investments and over 60,000 members
GMI’s Funds Under Management grew to over $1.7 billion
Kiwi Insurance posted a profit of $1.9 million in 2012
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Awards
2012 Reader’s Digest New Zealand – New Zealand’s Most Trusted Bank Brand – 6 years in a row
Roy Morgan Research 2012 Customer Satisfaction Awards – Major Bank of the Year
2012 CANSTAR Awards
First Home Buyer
Best Value New Zealand Term Deposits
2012 Sunday-Star Times Canstar Cannex Bank of the Year Awards
Most Price Competitive Bank
Sunday-Star Times Bank of the Year 2012
2012 NZ Innovators Award – Marketing and Communications
2012 TVNZ NZ Marketing Industry Award