Kiwibank profit more than doubles in September quarter to NZ$17.6 mln as net interest income surges 38%

Kiwibank profit more than doubles in September quarter to NZ$17.6 mln as net interest income surges 38%

By Gareth Vaughan

Kiwibank has turned the tables on its recent poor financial performance, with profit more than doubling in the September quarter.

The surge in profit after tax for the three months to September 30 to NZ$17.602 million from NZ$8.663 million in the same period of last year came as the state owned bank grew net interest income by NZ$16.520 million, or 38%, to NZ$59.920 million.

Total operating income, which includes fee revenue and revenue from payment services provided to parent New Zealand Post, rose NZ$18.613 million, or 23%, to NZ$99.868 million. Operating expenses rose at the significantly slower rate of 13%, or NZ$7.459 million, to NZ$66.793 million and impairment losses on loans fell NZ$1.608 million, or 17%, to NZ$7.921 million.

The September quarter profit rise comes after Kiwibank's June year profit more than halved to NZ$21.2 million, its June quarter profit tumbled 35% and its March quarter profit collapsed to just NZ$814,000 from NZ$12.2 million.

The vastly improved September quarter performance comes after Kiwibank CEO Paul Brock told interest.col.nz in August, after the annual results were released, he "strongly believed" the worst was behind the bank with positive signs for growth and an improved financial performance with new customers continuing to join Kiwibank, rising net interest income and bad debts stabilising.

Kiwibank's General Disclosure Statement for the three months to September shows lending rose NZ$358.920 million in the three month period to NZ$11.853 billion. Residential mortgage lending rose NZ$318.066 million to NZ$10.948 billion.

Total assets rose NZ$856.496 million to NZ$14.731 billion and total liabilities rose NZ$835.359 million to NZ$14.102 billion with deposits - both retail and wholesale - up NZ$640.745 million to NZ$11.227 billion.

Assets at least 90 days overdue but not impaired fell to NZ$27.409 million from NZ$32.775 million with impaired assets also down, to NZ$102.648 million from NZ$106.007 million.

Kiwibank's tier one capital ratio fell to 8.8% at September 30 from 9% at June 30 and its total capital ratio was unchanged at 11%. The Reserve Bank mandated minimums are 4% and 8%, respectively.

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Iron rule: gubment banks ALWAYS end up costing the taxpayer BILLIONS. Give it time.