Major Chinese banks operating in New Zealand continued to make significant inroads last year, with a strong rise in overall assets across all three look to cash in on the growing trade ties between the two nations.
Trade between China and New Zealand has tripled to $23 billion since the free trade agreement between the two nations came into force in 2008. The money flow looks set to continue after New Zealand Prime Minister Bill English and China Premier Li Keqiang last week signed off a series of cooperation deals spanning trade, customs, travel and climate change and agreed official talks to upgrade the existing FTA between the nations will start on April 25.
However, while all three banks have primarily targeted corporate clients since setting up shop here, they are also gradually increasing their residential mortgage portfolios, benefiting from a massive housing boom.
China Construction Bank of New Zealand - a fully-owned subsidiary of China Construction Bank Corporation that registered as a New Zealand bank in July 2014 - reported total assets of $887.8 million in the year to December 31, up from $401.9m in the prior year. It also reported a net profit of $1.8m, up from a net loss of $4.7m in the prior year, as net interest income more than doubled and its net operating income more than tripled. The bank significantly increased its residential mortgage portfolio, which jumped to $381.6m versus $72m in the prior year. Its corporate loan portfolio was $363.6m versus $235m in the year to December 31, 2015.
Bank of China New Zealand, a unit of Bank of China, reported total assets of $514.5m, up from $208.4m in the prior 12 months. Its net loss for the 12 months was $1.63m, narrower than the $6.17m in the prior period, again on much higher net interest income and operating income. BOC NZ set up shop in November 2014. Corporate loans jumped to $309.4m from $144.5m in the prior year. It also turned to the housing market with loans of $33.8m at the balance date versus none in the prior year.
