BNZ has posted a $494 million half-year statutory net profit for the six months to March 31.
The results were down $301 million, or 37.9%, on the previous year.
The bank said this was largely down to a "one-off" reduction in its capitalised software assets after some changes in capitalisation policy.
"Excluding this one-off adjustment, BNZ’s net profit was down $48 million to $747 million."
It held a total credit impairment provision balance of $995 million, which was being increased by $20 million year-on-year and included a "forward-looking adjustment for the potential impacts of the Middle East conflict."
Credit impairment provision funds are set aside by banks to cover potential losses from borrowers who may fail to make repayments.
The morning's headlines in 90 seconds, including a grisly murder shocks Sydney Police, and Liam Lawson crashes out of the Miami Grand Prix. (Source: Breakfast)
BNZ chief executive Dan Huggins said the result reflected the state of the economy before the Middle East conflict, with improved confidence and increases in housing and business lending.
The bank's home lending was up 6.6% and business lending was up 2.2% on the prior half-year period. Total lending was up by 4.7% – $5.1 billion – to $113.6 billion.
“While it was pleasing to see a return to confidence in the New Zealand economy, the Middle East conflict has eroded that positive sentiment and our customers have once again had to adjust quickly,” Huggins said.
“New Zealanders have shown resilience in recent years, but the impact of higher fuel prices on households and businesses has seen a change in sentiment from growing confidence to one of caution."
Total customer deposits were also up – by $4.5 billion or 5.3% to $89.9 billion.
Its net interest margin, a measure of profitability that compares interest a bank earns to interest it pays, was down four basis points.
This reflected strong competition for customers, BNZ said.
One of those competitors, ANZ, posted a $1.238 billion half-year profit last Friday.
At the time, ANZ chief executive officer Antonia Watson also pointed to the global uncertainty caused by the war in Iran.
“Events in the Middle East are a reminder of how quickly global shocks can ripple through our economy and undermine what remains a fragile recovery.
“The economic outlook remains uncertain, and our focus is on maintaining the strength of the bank and supporting customers and the wider economy as challenges emerge.”
SHARE ME