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Huljich Wealth Management has announced that former Reserve Bank Governor and National Party leader Don Brash has taken over as Managing Director and Chief Investment Officer at Huljich Wealth Management. He is taking over from Peter Huljich, who has resigned after taking responsibility for “not living up to the highest standards of transparency.” (Update 1 includes Trustees Executors welcoming move)

Huljich has been mired in controversy in recent weeks over allegations it misrepresented the performance figures for its KiwiSaver funds.

“In recent days, there have been a number of allegations about the way Huljich KiwiSaver Funds have been managed,” Brash said in a statement. “Some of these allegations are unfair and some are untrue,” he said.

“But since I returned from overseas last week, the board has conducted a full review of our operations. It has become clear that the board has not been kept fully informed in a timely manner about certain transactions, and as a consequence Huljich Wealth Management has not lived up to the highest standards of transparency,” Brash said.
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ANZ has released its New Zealand branch General Disclosure statement for the three months to December 31, reporting a 52% increase in net profit to NZ$253 million from the same period a year ago. ANZ, which also owns National Bank in New Zealand, reported a fall in provisions for bad debt and flat costs over the quarter.

ANZ New Zealand Chief Executive Jenny Fagg said the New Zealand economy had stabilised and would slowly gather pace over the next year or two, which would help drive a significant improvement in ANZ’s business performance.

“We are encouraged by the lift in profit in the December 2009 quarter compared with the September quarter, in line with signs of recovery in the broader economy following the recession,” Fagg said.

“Provision trends are moderating. A key improvement in the December 2009 quarter is the pronounced reduction in provisioning for credit impairment which has decreased from $351 million (September quarter) to $151 million.”

Here is the full ANZ release below.

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Credit rating agency Moody’s has upgraded its industry outlook for New Zealand’s banking system to stable from negative, saying asset quality concerns should ease following a return to economic growth and unemployment forecasts lower than previously thought.

(Update 1 adds Moody’s report.)

Moody’s also changed the Australian banking industry’s outlook from negative to stable.

Here are Moody’s comments on New Zealand’s banking industry. Outlooks for industries represent Moody’s view on the likely future direction of credit conditions in those industries. They do not represent Moody’s projections of rating upgrades versus downgrades

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New Zealand banks increased their net interest margins slightly during the second quarter of 2009 because they were able to book profits from fixed mortgages broken in previous quarters, KPMG’s financial analysts said in their quarterly update on the performance of financial institutions. (Update 1 includes more on interest margins.)

The quarterly update on New Zealand’s five biggest banks (ANZ National, ASB, BNZ, Kiwibank, Westpac) shows that they posted a combined loss after tax of NZ$348 million during the June quarter after BNZ made a NZ$661 million provision for its structured finance tax case with the IRD. Without the tax provision, the five banks would have made an after tax profit of NZ$313 million, down from NZ$483 million in the March quarter and NZ$722 million in the June quarter last year.

The fall in profits was due to a rise in impaired loan charges as well as revaluation losses on financial instruments, the report said.

The banks’ net interest margin improved to 2.07% over the quarter from 1.99% in the March quarter, but remains down on the 2.15% seen a year ago. However, funding costs had increased faster than associated lending costs due to increased competition for local term deposits.

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ANZ economists said they were “in no doubt” that further measures would be introduced over coming years to compliment the Official Cash Rate, with the focus on controlling bubbles in the dairy and housing sectors.

In their weekly comment piece, the ANZ National economists said the dairy sector was likely to face different capital lending requirements at some stage, which would mean higher lending margins.

They also said a capital gains or land tax may not be taken up for ‘political reasons’, but that “the rules will change” either through depreciation rates, elimination of various deductabilities or some other tax modifications.

“(Y)ou can’t have an investment class such as housing, which is NZ’s biggest, and expect the Government to continue giving that investment class an aggregate tax refund, which is the current absurdity,” they said.

Here are the economists’ comments on the impending changes:

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Alex Tarrant presents 90 seconds at 9am in association with ASB (Watch video here).

US GDP rose 3.5% in the third quarter from a year ago, its first growth in over a year spurred by the government’s stimulus package, Bloomberg reports. Household spending was up 3.4%, its biggest rise in two years. The question now is whether this growth is sustainable into 2010, with the US facing a record US$1.4 trillion budget deficit and unemployment near 10%. They also have to look at what will happen when they withdraw all the stimulus.

The New Zealand dollar rose overnight to around 73.5 USc. It had fallen below 72 USc following the Reserve Bank of New Zealand’s Official Cash Rate announcement yesterday. The OCR was left unchanged at 2.5%, with Governor Alan Bollard saying he expected it to stay there until the second half of 2010.

The Dow was up around 2% in late trade.

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