BNZ turns $1.5 billion profit

Bank of New Zealand (BNZ) has reported a $1.509 billion net profit, a $95 million or 6.7% increase on the year before.

For its 2023 financial year - a 12-month period ending on September 30, 2023 - BNZ said it saw a strong first half.

However net profit declined by 12.5% in the second half, reflecting Aotearoa's broader economic slowdown.

Chief executive Dan Huggins said challenging economic conditions impacted business and household confidence, resulting in a slower second half for 2023.

“Inflation, while softening, remains high, and as the official cash rate has risen, businesses and households have taken a more cautious approach to borrowing," he said.

“Despite the slowing economy and intense competition across the banking sector, we’ve continued to see growth across the business as more New Zealanders choose to bank with BNZ.

“Customer deposits are up 5.8% to $78.5 billion compared to the same period last year. Home lending increased 5.3% to $57.7 billion, with nearly 5,000 home loan customers switching to BNZ from other lenders in the 12 months to 30 September.”

Huggins added BNZ saw over $12 billion in total capital in 2023, a 15.7% jump on 2022, indicating that the bank "remains strong, stable and well capitalised".

BNZ also reported $102 billion in loans and advances for customers, a $2.5 billion increase on 2022 driven by home loan growth.

Customer deposits and other borrowings also increased by $2.8 billion to $81 billion, while KiwiSaver funds under management climbed 17% to $733 million.

Huggins said economic growth is expected to remain flat for the next 12 months, however BNZ is "cautiously optimistic" that business and household confidence will begin to rebuild in the coming period.

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“New Zealanders are resilient, and while the year ahead will remain challenging, we are optimistic about New Zealand’s future potential and prosperity."

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