BNZ posts 7.6pc rise in half year net profit

National Australia Bank (NAB)-owned Bank of New Zealand today announced its March half year net profit rose 7.6 per cent to $270 million.

Managing director Peter Thodey said result was particularly pleasing "in light of challenging market conditions arising from intense competition and a slowing economy".

NAB, Australia's biggest bank, reported a 27.7 per cent fall in first half net profit to A$1.99 billion ($2.50 billion). However, the previous first half had been boosted by an one-off item of more than A$1b from the sale of NAB's Irish banks.

The bank's total assets rose 16.5 per cent to $49.3b. Its loan book swelled 9 per cent to $39.9b while its derivative financial instrument book tripled in size to $2.5b.

Net interest income rose 9.6 per cent to $524m from the same period last year.

Mr Thodey described the result as "outstanding". He said the bank had restricted its margin decline to eight basis points despite its aggressive mortgage campaign.

Bank of New Zealand (BNZ) said it had held its market share in key markets.

"While we are known throughout the market as highly competitive, we are not out to win business at any cost," Mr Thodey said.

The bank's credit quality remained excellent, he said.

"Our approach has always been to ensure that our customers can comfortably meet their obligations."

Mr Thodey said the bank was looking to stretch its brand beyond traditional strongholds.

The bank was trying to attract new customers with a team dedicated to switching customers to start work next week.

The service had been piloted, with good feedback.

Mr Thodey said BNZ's new business debtor finance service had been well received.

BNZ's customer satisfaction survey rose to 66 per cent from 65 per cent -- its highest level since 1997 but still well below other banks such as ASB and Kiwibank.

NAB said it was two years into a three-year restructuring designed to cut costs and red tape. It said it would probably cut up to 200 more jobs on top of the original target of 4660 -- 10 per cent of its total workforce in Australia, Britain and New Zealand.

"If you think the turnaround is finished, you're wrong. There is still quite a lot to do to improve these businesses," chief executive John Stewart told reporters.

No details of possible cuts in New Zealand were available.

- NZPA