KPMG's June quarter FIPS shows banks' lifted profit by almost 15%, loan provisions steady at higher levels

New Zealand's key retail banks grew profit by nearly 15% in the June quarter, according to KPMG.

KPMG's June quarter Financial Institutions Performance Survey (FIPS) shows net profit after tax across the banks rose $182 million, or 14.61%, to $1.424 billion in the June quarter from $1.242 billion in the March quarter. This was a turnaround from an 11.35% drop in the March quarter versus the December quarter.

"This result has been driven by an increase in interest income of $48 million, an increase in non-interest income by $77 million, a decrease in impaired asset expense of $116 million, and a slight dip in operating expenses of $7 million, with only an increase in tax expense offsetting the growth in profit," KPMG says.

"Loan growth has continued its path of steady modest increases, with Heartland just slightly ahead of TSB's loan growth in the quarter. Both banks continue to lead the year-to-date growth with 12.28% and 13.61%, respectively. Some of the major banks also experienced an uptick in quarterly loan growth, with BNZ, ANZ and CBA all recording quarterly growth above 1.5%."

"Asset quality seems to have stabilised in the quarter after a slight deterioration in the prior quarter, with a relatively low amount of impairment expense and fairly stable provisioning. Although this trend appears to show the prior quarter spike was more likely driven by a variability of results than by a clear signal of a turning point in the market cycle, and given provision levels have been held at these higher levels, this direction may still be an early indicator of coming change," said KPMG.                   

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6 Comments

Maybe they could give us Boomer - aged depositors a better deal on our savings for starters

Hahaha, I think society as a whole has given Boomers plenty enough over the years.

Boomers certainly know how to vote and use the dying main-stream-media to their advantage. I Don't know how sustainable it is, but they're doubling down on their tried-and-true strategies .. it's working for them so far.

Boatman,

You could of course simply put your savings in bank shares. Thus,Westpac's dividend yield today is 7.16%,well above any deposit rate available.Since the banks are making so much profit,they are unlikely to cut the dividend.

I have a couple of friends working for these banks that are so quick to announce their massive profits and want to be seen as helping the average man. It is sad to see that these profits come on the (broken)backs of people made to work additional hours constantly to meet unrealistic deadlines. No new staff to help the teams cope with increased workloads and at the same time they are made to justify bonusses (not)given to them for helping the fat cats get fatter. @Boatman agreed! How about a better deal?

Banks. The biggest fraud ever committed on the people. I still can't comprehend why we've allowed it. I guess the shiny baubles and trinkets are more powerful than I understand.