By Paul McBeth
Kiwibank has increased first-half profit 1.4 percent and says it's on track to beat its 2015 annual earnings, growing its loan book faster than the broader banking sector, particularly in residential and business lending.
Wellington-based Kiwi Group Holdings, which includes the lender's wealth management and insurance businesses, posted a net profit of $73 million in the six months ended Dec. 31 from $72m a year earlier, with total operating revenue up 5.4 percent to $271m, it said in a statement.
The banking unit on its own delivered unchanged earnings of $71m on a 5.2 percent increase in revenue to $245m.
Kiwibank paid a dividend of $24 million to NZ Post, its second cash distribution to its shareholder, and chief executive Paul Brock said Kiwibank is on target to meet or exceed its 2015 earnings of $127m.
"We have plans for an upward track and that's a steady upward track overall and similar levels of growth to what we're currently seeing," Brock told a briefing in Wellington.
NZ Post today reported a 10 percent lift in first-half profit to $110m, largely due to one-off gains from asset sales.
Its loan book grew 8.6 percent to $16.33 billion as at Dec. 31 from a year earlier, with mortgage lending accounting for the bulk of its book. Residential loans grew an annual 8.5 percent to $14.35b, while business lending expanded 8.9 percent to $1.64b.
The bank's impairment charges on bad debt fell to $6m in the half from $9m a year earlier, and 0.8 percent, or $135m, of loans were past due but not impaired.
However, Brock said the lender's strong asset quality won't continue as the economy starts to slow.
Brock said wholesale funding costs were increasing for banks, though Kiwibank was largely funded through local deposits, growing customer deposits 8.6 percent in the year to $14.41b.