BNZ adds $283m to group profit

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The Bank of New Zealand contributed cash earnings of $283 million to parent National Australia Bank's A$2.7 billion half-year profit, the bank said yesterday.

The New Zealand result was an 11 per cent increase on a year earlier, while the parent increased its profit by 21.7 per cent and its United Kingdom business notched up 26.2 per cent growth. NAB, which is run by former BNZ boss Cameron Clyne, described the economy as subdued and it booked a $60 million provision for the earthquakes in Christchurch.

The cash earnings of NAB's wholesale division dropped 2.5 per cent due to lower revenue from the markets divisions, particularly in New Zealand. But the bank said the margins in its New Zealand banking business are improving due to "repricing for current market conditions" and increased demand for variable rate housing mortgages.

The bank's net interest margin in New Zealand was 2.24 per cent, unchanged from the previous six months and compared to 2.08 per cent in the same period a year ago.

Net interest earnings for the six months to March 31 were up 7.6 per cent from the year before to $640 million, although only $2 million up from the September half year.

Retail deposits were up 9.7 per cent from a year earlier, and 5.6 per cent from the preceding half year, to $30.4 billion. Market share was up to 18.1 per cent from 17.5 per cent a year earlier. Chief executive Andrew Thorburn said that all the bank's financial indicators were positive and that its funding and capital position were strong.

"It will be a challenging six months, but we should be looking forward with confidence as a country over the next couple of years about the growth that we can experience," Thorburn said.

- Additional reporting NZPA