Westpac New Zealand's first half-year cash earnings rose 24% with net interest margins up 6 basis points and impairments on loans dropping 9%.
Australia's Westpac Group said today cash earnings at its New Zealand subsidiary rose NZ$64 million to NZ$333 million in the six months to March 31 from NZ$269 million in the same period of the previous financial year.
That's record high first half-year profit for the bank and follows rivals ANZ NZ and ASB delivering the same in their half-year results. The fourth big Australian owned bank, BNZ, reports its half-year results on May 10.
Westpac NZ's net interest margins rose 6 basis points during the six months to March 31 to 2.43%. Its expense to income ratio fell to 42.7% from 44.1% in the second-half of the previous financial year. The bank said impairments were down 9% - versus the second-half of the 2011 financial year - to NZ$98 million. Lending rose 4% and deposits increased 6%. See the Westpac Group's full presentation here.
Gail Kelly, Westpac Group CEO, said the New Zealand business delivered a strong performance, benefiting from previous investment in the branch network.
"Balance sheet growth was modest with lending up 4% (to NZ$58.2 billion) and deposits up 6% (to NZ$39.4 billion), reflecting the subdued economy. Improved margins, strong wealth and insurance cross sell and lower impairment charges contributed to the strong result," said Kelly.
She added that confidence and activity in New Zealand were showing some signs of improvement as the rebuild of Christchurch gathered momentum, although the pace of improvement was likely to be slow.
Westpac NZ's mortgage portfolio rose 1% - from September 30 last year - to NZ$35.4 billion with 52% of mortgages on variable, or floating, mortgages at March 31, which is up from 41% a year earlier and 47% at September 30 last year. Westpac NZ's business lending grew 1%.
With deposit growth exceeding loan growth, the deposit-to-loans ratio improved to 68% from 66%.
Westpac NZ's total customer numbers rose 1% to 1.27 million. Total full time employee numbers fell 47 to 4,613 with revenue per average full time employee coming in at NZ$212,000 versus NZ$203,000 in the second-half of the 2011 financial year.
Meanwhile, the Westpac Group's interim cash earnings rose 1% from the same period of last year to just under A$3.2 billion. The bank will pay a fully franked interim dividend of A82 cents per share, up 3%. Group net margins fell 6 basis points to 2.17%. See Westpac's press release here.
(Updates add further detail).