By Gareth Vaughan
Bank of New Zealand recorded a 35% jump in June quarter profit as income rose and impairment losses on loans halved.
Based on figures from BNZ's latest General Disclosure Statement, the bank's unaudited net profit after tax rose $62 million, or 35%, to $238 million in the three months to June 30 from $176 million in the same period of last year.
The rise came as impairment losses halved to just $6 million, and total operating income climbed $83 million, or 18%, to $537 million.
Net interest income was up $8 million, or 2%, to $386 million. Operating expenses rose $9 million, or 5%, to $207 million.
Based on the bank's loan-to-value ratio (LVR) disclosure, BNZ grew residential mortgage lending by $371 million, or 1.3%, in the June quarter to $29.330 billion. Of the net growth, $174 million, or 47%, came from high LVR loans, or lending where the borrower has a deposit equivalent to less than 20% of the property's price.
As of June 30, BNZ had 15.16% of its home loans at LVRs above 80%, up from 14.75% at March 31.
The Reserve Bank announced this week banks must restrict new residential mortgage lending at LVRs of over 80% to no more than 10% of the dollar value of their new housing lending flows from October 1. Allowing for exemptions, the Reserve Bank estimates this 10% "speed limit" will effectively restrict the banks’ high-LVR lending flows to about 15% of their new residential lending.
Deposits up 5%, gross lending up 1.4%
In the June quarter BNZ grew total deposits by $1.998 billion, or 5%, to $40.835 billion, well ahead of its 1.4% rise in gross lending. Gross loans rose $864 million to $62.127 billion.
Through the three months to June 30 BNZ's assets at least 90-days past due rose $2 million to $265 million. Its total impaired assets rose $30 million, or 7%, to $447 million. Total assets increased $3.3 billion to $76.109 billion and total liabilities rose $3.1 billion to $70.528 billion. Total shareholder's equity was up $178 million, or 3%, to $5.581 billion.
For the nine months to June 30, BNZ paid its parent, National Australia Bank, dividends of $110 million. That's up from $25 million in the same period of last year.
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