BNZ first-half net profit falls

Tuesday 28th April 2009

Bank of New Zealand, the local unit of National Australia Bank, posted a 3.8% drop in first-half profit on increased funding costs and higher charges for bad and doubtful debts.

Net profit fell to $400 million in the six months ended March 31, from $416 million a year earlier, the lender said in a statement. Bad and doubtful debt charges rose to $96 million from $66 million a year earlier, while the actual level of net write-offs amounted to 0.13% of gross loans.

“In the last six months we have faced unprecedented disruptions in the global credit markets and recession in the domestic economy,” said chief executive Andrew Thorburn. He described the first-half performance as “a solid result achieved in a period of highly volatile markets and a challenging economic environment.”

The decline in profit outpaced the drop in earnings at National Australia, with Australia’s biggest lender reporting a 0.9% slide in first-half earnings to A$2.66 billion and collective provisions rising A$1.2 billion to A$3.6 billion. Shares of NAB fell 0.9% to A$21.85 in Sydney today, while the S&P/ASX 200 Index gained 1.2%.

Underlying cash earnings at NAB, which exclude one-time items and credit risk on derivatives, fell 9.4% to A$2 billion.

Net interest income at BNZ rose 3.4% to $704 million in the first half and net operating income gained 2.7% to $1.04 billion. Operating expenses improved by 7.9% to $372 million.

The lender’s New Zealand Banking unit, which includes retail, BNZ Partners and insurance, reported an $11 million drop in earnings to $228 million.

Businesswire.co.nz

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