BNZ pre-tax profit up 43% on strong BNZ Capital result

BNZ has released its General Disclosure Statement (GDS) for the December quarter, showing a 43% increase in pre-tax profit to NZ$369 million for the quarter from the same quarter a year ago, largely due to a tripling of profit from its BNZ Capital institutional and trading division to NZ$215 million. Meanwhile, the GDS also shows that housing loans fell to NZ$24.131 billion in the quarter from NZ$24.159 billion at the end of the September quarter, while other term lending to farmers and businesses rose to NZ$24.861 billion from NZ$23.878 billion. These figures appear to show BNZ's profit growth and lending growth was driven out of its corporate and institutional banking arms rather than its retail bank in the quarter. BNZ's allowance for impairment losses rose to NZ$222 million from NZ$215 million in the September quarter. Corporate loans that were past due by 90 days or more doubled to NZ$87 million in the quarter, while overdue housing loans rose only slightly to NZ$36 million from NZ$31 million. BNZ grew its customer deposits to NZ$26.475 billion by the end of December from NZ$25.920 billion at the end of September, although most of this was in the more expensive interest-bearing demand deposit and term deposit areas. BNZ paid a dividend to its parent NAB of NZ$217 million for the quarter, which was down from NZ$388 million in the previous quarter. BNZ's tier one capital ratio as a percentage of total risk weighted assets fell to 7.94% by the end of December from 8.05% at the end of September. * This article was first published yesterday in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.