Westpac NZ posts 41% rise in annual cash earnings to NZ$454 mln as impairments drop, margins rise

Glad I do not have any deposits with them....fatter pay for the bosses with bloated bonuses on top....why is Bollard determined to continue with policies that make the banks fat with profits?

$100 per New Zealander, and thats just one of 4 big banks.  Not a bad return for creating money from thin air. 

a very good,productive export effort indeed  - the Qantas boss got a 71% pay rise the other day  when its losing $15 mill a week he said , so George should be in line for a modest  bonus of say 2 mill at least

How do I get a Banking licence ? It just goes to show that in a low OCR environment , the Banks margins are massive.

Banks Unsecured lending rates are close to or around 20% per annum, and their borrowing costs are under 5%  .

Nice business 

That said , its quite unacceptable that banks are so profitable in the worst recession in 100 years 

on total deposits of what? 80 billion. 

with shares in heartland i can't wait until they get a license to print money

FYI from the union on the result:

Westpac’s strong cash earnings growth shows that the big Australian banks have not only survived but thrived during a global recession on the back off their own staff and customers, says the union for bank workers.

Westpac today reported a 41% rise in annual cash earnings for its New Zealand division.

“Westpac is not alone – BNZ announced an 11.5% increase in annual net profit after tax last week, and ANZ will make its announcement tomorrow,” said FIRST Union General Secretary Robert Reid.

“All of the big banks profits are well and truly back in the cycle of making huge profit jumps each year, while holding down the wages of staff and keeping the pressure on customers with high interest rates.”

“This profit announcement of Westpac comes on top of the revelation earlier that this year that its New Zealand CEO, George Frazis, is earning $NZ 5.8 million a year.

“Westpac workers go into bargaining with the company next week and we want the bank to demonstrate that their own workers are just as much a priority as paying out high dividends or $5.8 million CEO salaries,” Robert Reid said.

“Bank staff are in a similar position to many other Kiwi workers, with pay increases barely keeping up with or falling behind rising costs.

“Unlike some other employers, however, the banks are in the position to be able to pay at least 5% pay increases without scratching the surface of their massive profits.”

Robert Reid said that the banks had been operating without accountability for too long.

“With a government that won’t improve regulation of the banking sector and instead dishes out cuts to corporate tax rates, the big Australian banks have been grabbing the most profits for themselves while sharing as little as possible with customers and staff.”

Robert Reid said now that bank workers were part of New Zealand’s second largest private sector union, that there was an increased expectation that when profit rises, so should pay.

FYI from the Greens on bank profits.

Record bank profitability and dividend payments of our overseas-owned banks highlights an on-going structural weakness in our economy, said Green Party Co-leader Dr Russel Norman today.

Dr Norman was responding to the posting of strong full-year profit results from Australian-owned ASB, BNZ, and Westpac banks over the last week. Westpac New Zealand announced cash earnings were up 41 percent to $454 million today, a majority of which will be paid out to its parent company in Australia.

“These are very good times for our big four Australian-owned banks, despite the weak economy," said Dr Norman.

“ASB, ANZ, BNZ, and Westpac have collectively sent $8.9 billion out of the country in the form of dividend payments to their parent banks in Australia over the last five years.

“This capital out-flow is unsustainable for New Zealand Inc. and highlights the urgent need for greater local ownership of our banks.

“Only one bank — Kiwibank — approaches anything like a suitable rival to the big four Australian banks, but it controls just 2.5 percent of total banking assets compared to 90 percent controlled by the Australian-owned banks.

“It's not in New Zealand's economic interest to remain a wholly-owned subsidiary of the Australian banks," Dr Norman said.

Last month, Dr Norman questioned Finance Minister Bill English directly about the high level of foreign ownership of our banking sector through parliamentary questions. In response, the Minister said, “The high level of foreign ownership has been an enduring feature of the New Zealand banking system for many years and of itself is not a source of concern.”

“Once again, we see a National Government without a plan to shift our economy onto a more sustainable footing,” said Dr Norman.

“The National Government is happy for the New Zealand economy to remain a cash cow for our Australian banks.”

The Green Party’s plan for the economy involves strengthening Kiwibank through dividend retention and capital injection so that it can effectively compete with the big four Australian banks. The role of the other New Zealand-owned banks, building societies, and credit unions is also important.

“The Government needs to invest further into Kiwibank to bring it up to the point where it can compete effectively with the big four Australian-owned banks,” said Dr Norman.

Good point ctnz, falling bad debts was the bulk of the gains plus taking some of the othe rbanks market share in deposits and loans - good business management I would have thought rather than

Boatman - are you about 15 years old - were you not around in 1987 and many many other periods odf NZ history - no way has this so far been the worst recsession in 100 years