Westpac says it's launching "Grow New Zealand" a programme that will see CEO George Frazis hosting forums across the country for businesses as the bank strives to both help restore confidence in the economy and "pull the economy forward."
Westpac New Zealand's announcement comes as Australian parent the Westpac Group released a first quarter trading update in which it reported a 5% rise in cash earnings to A$1.55 billion. Of New Zealand, the Westpac Group said its business here had "further improved" its performance with higher net interest income with higher margins principally from the roll-over of lower spread fixed rate mortgages.
"The (New Zealand) division has good momentum, growing share in mortgages," Westpac Group CEO Gail Kelly said.
"This performance, combined with improving margins, assisted returns. Asset quality is stabilising with impairment charges further declining."
New Zealand lending was "relatively flat" in a market where systems wide lending has been subdued. Westpac New Zealand's tier one capital ratio slipped to 9.7% at December 31 from 9.9% at September 30 last year. Its total capital adequacy ratio was unchanged at 12.7%. Westpac New Zealand plans to issue 1 billion euros (NZ$1.78 billion) worth of covered bonds to European institutional investors this month.
Last November Westpac said its interest margin rose to 2.16% in the six months to September from 2.07% in the six months to March. Its overall lending grew 2% in the September year, versus a 0.3% fall in systems credit. Frazis told interest.co.nz in November that Westpac's growth was high quality and given margins were improving, the bank wasn't buying market share.
Want's to hear what businesses need if they're to invest for growth
Meanwhile, Frazis said the purpose of its Grow New Zealand campaign was to hear first hand at local levels from both big and small businesses, what businesses need to invest for growth and what's needed to grow the economy.
"The economic recovery slowed in 2010, with GDP stagnant over a six month period in the middle of the year," Frazis said. "Business confidence is fragile and the labour market sluggish and it is important that business and boards regain confidence and invest for growth."
Westpac's initiative comes after the latest monthly Reserve Bank data shows total business sector credit rose by NZ$1.006 billion in December to NZ$73.043 billion, easily the strongest monthly rise during 2010. The December rise followed the central bank saying in last November's Financial Stability Report that it wanted to see "modest growth" in business credit to help sustain an economic recovery.
Read Westpac's statement below:
Westpac has launched Grow New Zealand, a programme to help restore confidence in the economy and pull the recovery forward.
Grow New Zealand will start with Chief Executive Officer George Frazis hosting forums across the country to hear first hand what businesses, large and small, need to invest for growth. The forums will be held in cities and provincial centres with local business people from various sectors invited to attend in addition to community leaders.
The emphasis will be based on hearing first hand what business needs and then looking how to help with viable and practical solutions.
“Banks are key planks in the economy and Westpac is determined to be proactive in trying to pull forward the recovery and get the economy moving again,” Mr Frazis said.
“We want to hear first hand, at the local level, what is needed to grow New Zealand. Our operating model is for local bankers to make local decisions and the forums are a logical extension of that strategy.
“We are looking to feed what we learn from the forums into other work Westpac is already doing to create a practical programme to help play our part in getting the economy moving again and to grow New Zealand.”
The economic recovery slowed in 2010, with GDP stagnant over a six month period in the middle of the year. Business confidence is fragile and the labour market sluggish and it is important that business and Boards regain confidence and invest for growth.
Mr Frazis said the objective of the Grow New Zealand program is simple. “Our goal is to Grow New Zealand,” he said.
(Update adds detail of the Westpac Group's first quarter trading update, further detail and background).
9 Comments
PDK - that Westpac statement (in its entirity, and most individual paragraphs) suggest cognitive dissonance.
E.g: "The economic recovery slowed in 2010, with GDP stagnant over a six month period in the middle of the year."
and
"Mr Frazis said the objective of the Grow New Zealand program is simple. “Our goal is to Grow New Zealand,” he said."
well it's a nice idea isn't it? banks recognise they are a neccessary part of the community/economy and act in a manner that benefits the entire country, of which the bank is a citizen.
personally i'd like to see a bit of a mea culpa on there and some eveidence of a holitic view of the world, but i expect that's probably absent because this is just a PR exercise
How very Noble of them. Nurturing the crop (of future borrowers) to produce a better yeild (debt). They're doing it for us !! Bless.
See, its simple really. Lets look at the problem. People have been deleveraging, paying back debt, and worse; saving. That's not a sustainable business model for a bank. No. Without selling debt and continually increasing the supply of money the system starts to look a little .. well not good.
But the Keynesians have a couple of cards left to play, that's my predictions anyway. First up, Bollard will lower the OCR this year in an effort to get the munny flowing again, but he will find that it will be short lived. So he'll be faced with his only remaining option; to play the black queen, Q.E.
Long. Wheelbarrows and pitchforks.
WP:
" we need to grow for the future boom" so BORROW BORROW NOW FROM US!
The WP CEO is clearly desperate which is clearly indicated via his ridiculous message of more of the same!
What I can't believe is why Fairfax did not charge WP a promotional advertising fee over this BS 'press release'. You can really rely on the NZ media to read between the corporate lines and not be played like suckers! NOT
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