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BNZ half year cash earnings $255m

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 6 NZPA - Bank of New Zealand reported cash earnings of $255 million for its core New Zealand banking operations in the six months to the end of March.

The result was 7.1 percent up on the previous half year to September 2009, but down 8.6 percent compared to the same period last year.

BNZ chief executive Andrew Thorburn said the result and conditions when compared against the September 2009 half year were encouraging and indicated that the worst of the recession was behind us.

Looking forward growth was improving, although subdued business and household credit demand, along with higher funding costs, would continue to be key factors, he said today.

BNZ's total capital ratio at 12.03 percent was well above the Reserve Bank's required minimum of 8 percent, while the tier 1 capital ratio at 9.03 percent was also well over the 4 percent regulatory minimum.

BNZ said it had focused on actively diversifying and lengthening the term funding profile of its balance sheet.

In an intensively competitive market for customer deposits, it achieved a 9.1 percent increase in average volumes over the past year, while deposit rates had risen significantly. Retail deposit market share increased to 17.5 percent from 16.1 percent in March 2009.

Leading asset quality indicators showed the growth rate of impaired assets during 2009 had declined and was stabilising, BNZ said.

A charge of $88m to provide for doubtful debts in the past six months was in line with the previous half year to September 2009 and down by $11m compared to the March 2009 half year.

Results for the total BNZ legal entity, including both New Zealand banking and BNZ's wholesale business, reported a headline profit of $415m in the six months to March, up 3.8 percent on the same period last year.

BNZ's parent, the National Australia Bank, reported a 8.2 percent rise in first half cash profit, while bad debt charges fell by a third and business banking and wealth management income improved.

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