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BNZ Reports $183m Nine Month Loss After Disputed Tax Bill

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Sept 1 NZPA - Bank of New Zealand has reported a $183 million bottom line loss in the nine months to June 30 after running large taxation items from the disputed structured finance court case through its income statement.

The statement includes $203m tax on its operating profit plus $416m tax from the disputed structured finance case and a $245m tax expense interest costs relating to the structured finance deals.

The loss in the nine months compared to a $597m profit in the same period last year.

The operating profit before impairment losses on credit exposures and tax expenses is $823m, down from $895m in the same nine months last year.

Impairment losses on credit exposures nearly tripled to $142m in the nine month period from $50m last year.

Net interest income of $1.03 billion was little changed from $1 billion last year.

The bank had earlier said it would take a $661 million provision for the structured finance court case through its accounts. The bank is appealing the case after a High Court decision went against it.

A segment breakdown showed a strong performance by BNZ Capital, the corporate and institutional division, which earned $249m in the period, up from $353m last year. New Zealand banking earned $384m, down from $493m in the same period last year.

Many banks have been making strong profits from their institutional divisions while financial markets have been volatile.

BNZ did not release a press statement commenting on the result.

B NZ is among five banks facing more than $2 billion of disputed tax assessments for 22 structured finance transactions. The other banks are treating the disputed tax as contingent liabilities.

BNZ has said the provisions for the tax case do not affect its ability to meet any debt or equity obligations.

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