media briefing financial results – 30 june 2012. topics covered key achievements profit...
TRANSCRIPT
MEDIA BRIEFING
Financial Results – 30 June 2012
Topics Covered
Key Achievements
Profit Performance
Balance Sheet Growth
Key Ratios
Capital Adequacy
Credit Quality
The Future
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Key achievements
Profit after tax of $79.1m for the year ended 30 June 2012, a 276% increase on previous year’s profit of $21.2m
Continued growth in balance sheet since June 2011:
Lending increased 8% from $11.5bn to $12.4bn
Customer deposits increased 9% from $10.6bn to $11.6bn
Customer growth continued and now exceeds 800,000
Celebrated 10 years since launch in Albany, North Shore, March 2002
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Key achievements continued
Purchase of Gareth Morgan Investments (by Kiwi Group Holdings Ltd).
GMI manages more than $1.5 billion of funds
Adds $650 million to Kiwisaver funds
Looking to consolidate the two Kiwisaver funds later this year
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Key achievements continued
Kiwibank’s credit rating confirmed as AA- by Standard and Poor’s
Rating amended from stable to negative following re-rating of New Zealand Post
‘AA’ Fitch rating granted in June 2012; outlook stable
Aggressive promotions in a static home loan market
Great success with one-year fixed rate of 4.99% (required more staff on the phones)!
Continued support of the Kiwibank New Zealander of the Year and local heroes
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Awards and achievements
Bank of the Year (Canstar and SST)
Best Value Bank (Canstar and SST)
First-Home Buyer Award (Canstar)
Highest level of customer satisfaction (Roy Morgan)
Most trusted bank brand (Reader’s Digest)
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Financial Performance – Profit & Loss
Kiwibank substantially increased net interest income and reduced expenses resulting in profit after tax rising 276%
Dollars in millions30 June
201230 June
2011 % growth
Net interest income 257 191
Other income 162 162
Total operating revenue 419 353 19%
Total expenses (308) (321) (4%)
Profit before tax 111 32 247%
Income tax expense (32) (11)
Profit after tax 79 21 276%
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Financial Performance-Historical Summary
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Dollars in millions 30 June 2012 30 June 2011 30 June 2010 30 June 2009 30 June 2008Financial performance
Interest income773 720 564 649 559
Interest expense(516) (529) (430) (485) (444)
Net interest income257 191 134 164 115
Other income162 162 168 149 123
Total operating revenue419 353 302 313 238
Operating expenses(273) (242) (219) (215) (179)
Impairment allowances(35) (79) (18) (14) (4)
Net profit before taxation111 32 65 84 55
Income tax expense (32) (11) (19) (20) (18)Net profit after taxation
79 21 46 64 37
Financial Performance-Balance sheet
Lending growth continues despite slowdown in the housing market Strong depositor support continues to maintain retail funding ratio
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Dollars in millions30 June
201230 June
2011 % growthAssetsLoans and advances 12,445 11,495 8%Wholesale & other assets 2,300 2,380 Total assets 14,745 13,875 6%
Financed by:LiabilitiesCustomer deposits 11,565 10,586 9%Securities issued & other liabilities 2,433 2,681 Total Liabilities 13,998 13,267 6%
Shareholder's equity 747 608 23%Total liabilities and shareholder's equity 14,745 13,875
Financial Performance (key ratios)
Ratios in percentage terms 30 June
201230 June
2011
Profitability measures
Net interest inc./average total assets 1.8% 1.5%
Net profit after tax/avg shareholder's funds 11.7% 3.5%
Efficiency measures
Operating expenses/total income 65.1% 68.5%
Operating expenses/average total assets 1.9% 1.9%
Capital ratios
Total capital ratio (Pillar 1) 11.3% 11.0%
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Financial Performance-Capital Adequacy
Total Capital ratio under Basel II is 11.3% compared to RBNZ’s minimum regulatory capital ratio of 8%
Total capital increased by $48m to $785m, a 7% increase from 30 June 2011.
$50m share capital injection by NZ Post to support business growth in December 2011
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Credit Quality (Impaired Assets)
The table shows total impaired assets as a % of gross loans and advances from Disclosure Statements dated 30 June 2011. Kiwibank remains favourably placed against other banks
The ratio has remained consistent across strong balance sheet growth as a result of targeting low LVR, seasoned (i.e. existing, switching) customers to maintain the quality of our lending book.
Impaired Assets of $84m include all assets where interest charges have been suspended and a specific provision has been raised. Down from $106m in 2011.
Source: 30 June 2011 Disclosure Statements.
30 June 2012 not yet available.
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Bank 30 June
2012 30 June
2011
Kiwibank 0.67% 0.92%ASB 0.65%BNZ 1.29%Westpac 1.59%ANZ/National 2.13%
Credit Quality
A key focus from management and RBNZ is the total credit provisioning to gross loans and advances
Each bank has a different product and risk portfolio to Kiwibank which has a high % secured mortgage book and LMI insurance for assets over 80%.
Credit Provisions as a % of Gross Loans and Advances
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Bank 30 June
2012 30 June
2011
Kiwibank 0.73% 0.76%ASB 0.46%BNZ 0.94%Westpac 1.25%ANZ/National 1.39%
Source: 30 June 2011 Disclosure Statements.
30 June 2012 not yet available.
The future
Roll out of new shops layouts for Post and Kiwibank following pilot in Kapiti
Continued focus on helping customers switch to Kiwibank
Push harder to increase market share in small and medium enterprise market
Growth opportunities in the insurance business – Bancassurance
Consolidate market position as a bank of national and strategic importance
Continued growth of Kiwisaver
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