New Zealand Post is revamping its branch network to put Kiwibank at the fore as it looks to take advantage of the bank's growth potential as its postal business declines.
The state-owned enterprise yesterday reported a 29 per cent fall in annual profit to $121 million for the year ended June 30 across its whole business.
But Kiwibank, which began 11 years ago, made a net profit of $97.1 million, up 23 per cent from a year ago as it boosted both its lending and deposit business.
Lending grew 6.5 per cent to $13.2 billion while deposits were up 4.3 per cent to $12.1 billion. Provisioning for impairment losses was down from $91 million to $72 million.
At the same time the postal business shrank with 7.5 per cent fewer items delivered in 2013.
Chief executive Brian Roche saw "significant challenges" for the postal business.
"We have already taken action around the rationalisation of our operating centres and we think there is more to be done there. Both the delivery network and the store network are going to have to be modernised and revolutionised if we are to maintain a sustainable business."
Roche said the company lost about $30 million a year on its retail network of 880 stores which it could not afford to carry.
Spokesman John Tulloch said New Zealand Post had begun trialling a new store format on the Kapiti Coast two years ago and had begun to roll it out at eight branches on Auckland's North Shore.
The new format offered two distinct areas for bank and postal customers as well as self-service kiosks designed to help people with transactional services.
Tulloch said the revamp was designed to lift up the Kiwibank component in response to customer demand and economic drivers.
"It's an opportunity for Kiwibank to drive greater business."
He said information gathered from rolling out the stores on the North Shore would guide the business on where it would take the revamp next.
- additional reporting Business Desk