Kiwibank profit falls 9% to NZ$23.5 mln in the first half

Kiwibank has reported a 9% fall in first half profit to NZ$23.5 million as its bad debt provisions rose 26% and its margins were squeezed by the need to go offshore for funding. See the full Kiwibank result beneath. I will report with more detail after a briefing I'm attending in Wellington.

Kiwibank has declared a profit of $23.5 million after tax for the six months ended December 31, 2009. This compares with a profit after tax of $25.8 million for the same period in 2008, a reduction of 9%. Kiwibank Chief Executive Sam Knowles described the result as "a strong performance in a very difficult financial environment". In the six months from July 1, 2009 to December 31, 2009: "¢ Total lending (home loans, business banking and credit cards) increased 15% from $8.5 billion to $9.8 billion "¢ Retail deposits increased 3% from $6.7 billion to $6.9 billion The bank has increased provisions for bad debts from $12.2m to $15.4m. Mr Knowles said the performance of Kiwibank had been recognised internationally with the award of the coveted New Zealand Bank of The Year by the London-based The Banker magazine and best value bank by Canstar and the Sunday Star Times for the fourth year in a row. The bank successfully raised $NZ309 million through a bond issue in Australia as Mr Knowles said it looked to widen its funding base for domestic residential lending. In the promotion area, Kiwibank entered its first major sponsorship with the launch of the New Zealander of the Year Awards and also created a youth website, Kiwi Connector, providing information, competitions and music. Mr Knowles said the Kiwibank PIE Unit Trust had continued to grow strongly [over the period]. "We now have almost 25% of the registered bank cash PIE market in New Zealand". Mr Knowles said the bank continued to build on its small and medium business banking base which he described as "one of the strong pillars of the bank". The bank also launched a new credit card range in association with Air New Zealand where customers can earn airpoint dollars able to be used for air travel and get access to cheap flights.