BNZ's interim profit rose 14% to $805 million as net interest income, the difference between the revenue generated from a bank's interest-bearing assets such as loans and the expenses associated with paying its interest-bearing liabilities such as deposits, rose 26%.
BNZ says net profit after tax for the six months to March rose $96 million to $805 million from $709 million in the six months to March 2022.
Net interest income increased $300 million to $1.464 billion, with total operating income up $277 million, or 19%, to $1.775 billion. BNZ says its net interest margin jumped 41 basis points to 2.45%.
Meanwhile, operating expenses rose $88 million, or 18%, to $577 million. And BNZ's credit impairment charge swelled to $79 million from $21 million. The bank reported a 14 basis points drop in its cost-to-income ratio to 32.5%.
BNZ says total loans rose $3.2 billion, or 3%, to $101 billion, as deposits increased $1 billion to $75 billion.
CEO Dan Huggins says BNZ is well positioned to support customers finding it tough in the current economic climate.
"We know our customers well and understand that many New Zealand households are feeling the pressure of cost of living increases, particularly those with home loans. While we're confident that our home loan customers are able to manage the current higher interest rate environment, for some, it will be challenging," Huggins says.
"As always, our message to customers is get in touch - we're here to help."
In its bi-annual Financial Stability Report on Wednesday, the Reserve Bank said for households that borrowed during the period of very low interest rates between late 2020 and late 2021, current interest rates exceed some of the test rates used by banks during this period.
"Therefore, some of these borrowers and other borrowers with high debt-to-income levels may begin to struggle to meet their repayment obligations as they reprice onto the higher rates. Around 25% of the current stock of mortgage lending was originated during 2021, with about a fifth of this being to first home buyers," the Reserve Bank said.
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