Bank of New Zealand, the local unit of National Australia Bank, posted a 1.8 per cent increase in net profit for the first nine months of the year as smaller charges on bad debt made up for largely flat income.
Net profit rose to $692 million in the nine months
ended June 30 from $680m, the lender's quarterly disclosure statement shows. Impairment losses shrank to $42m from $106m a year earlier, making up for a dip in operating earnings as expenses rose 5.6 per cent to $698m and offset flat operating income of $1.7 billion.
Net interest income slipped to $1.31b in the nine-month period from $1.32b a year earlier, while the bank's loan book expanded to $78.15b as at June 30 from $72.56b a year earlier. Of that, housing loans rose to $36.61b from $33.91b, and other term lending increased to $37.57b from $34.32b.
Earlier this month NAB noted an improvement in gross loans to assets in the June quarter, "mainly reflecting improved conditions for New Zealand dairy customers", and $158m of loans past 90 days due but not impaired plus a $545m provision for bad debts amounted to 0.89 per cent of gross loans, compared to 0.99 per cent three months earlier.
BNZ's June quarter disclosure statement said a recovery in farmgate returns for dairy farmer returned the majority of New Zealand farmers above breaking even but it was still "working closely with those customers for whom some level of financial pressure remains following the lower 2015 and 2016 pay-outs."
