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BNZ core ops cash earnings down 12.9 percent
Wednesday October 28, 11:13 AM
Bank BNZ reported a 12.9 percent drop year-on-year in reported cash earnings to $420 million for its core NZ Banking operations.
The results for the total BNZ legal entity, including NZ Banking and BNZ Corporate, showed a headline loss of $181m for the year to September, mainly due to a one-off tax case provision of $661m, BNZ said today.
Excluding the tax provision and non-cash items, BNZ's underlying profit on a cash earnings basis was $703m, driven by a strong performance by BNZ Capital in the first half, based on increased customer flows around hedging foreign exchange exposures.
NZ Banking's net interest margin was 2.13 percent, down 29 basis points on the previous year and bad and doubtful debt charges for the year were $185m, up from $67m.
BNZ chief executive Andrew Thorburn said the numbers showed BNZ continued to support business through the recession, with business lending volume up 8 percent year on year, versus market growth of 4 percent. Market share in lending rose across all key business segments.
BNZ also led the market in abolishing honour and dishonour fees in July, and in so doing shifted an estimated $25m back to customer wallets for the year ahead, Mr Thorburn said.
"We are emerging from a tough year with a sound balance sheet, good asset quality and strong capital ratios.
"As part of the NAB (National Australia Bank) group we remain one of around 10 banking groups globally which are AA rated."
NAB reported a 42.9 percent fall in annual profit after bad debt charges dented its bottom line, and said it saw signs the bad debt cycle was starting to stabilise.
Chief executive Cameron Clyne said the overall result for fiscal 2009 was solid given the difficult market conditions faced by the bank.
Net profit was $A2.589 billion ($NZ3.22b) for the 12 months ended September, down from $A4.536b in the previous year, the Melbourne-based bank said in a statement.
Group cash earnings, its preferred measure of profitability because it left out unrealised gains or losses related to asset values, fell 1.9 percent to $A3.841b, from $3.916b.
Underlying profit, which excluded expenses and bad and doubtful debt charges, was $A9.3b, up 14.6 percent.
The bank's bad and doubtful debt charge for the year was $A3.8b, up $A2.3b after excluding conduit costs.
Source:
- Telecom Corporation of New Zealand Limited (NZX: TEL.nz)
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