BNZ half year profit up 80% to $660 million

BNZ has released its half year result. Photo / File

The Bank of New Zealand's half year net profit rose 80 per cent to $660 million after the bank benefitted from a strong bounce back in the economy and big write-backs on its impairment charges.

Excluding notable items, its net profit increased by $64m or 13 per cent in the six months to March 31, compared to the same prior period.

BNZ chief executive Angela Mentis, said the result was evidence of a stronger and swifter than expected recovery.

"The continued resilience of our economy is testament to New Zealand's effective response, and the creativity and courage of businesses in the face of the pandemic," she said.

"An effective and determined response from Government and the Reserve Bank coupled with a strong banking and business sector has helped New Zealand weather the storm."

The bank's net interest income rose 2.1 per cent to $1.073 billion while it made large gains on its financial instruments helping to push up its operating income by 7 per cent to $1.4b.

At the same time its operating expenses were down nearly 23 per cent.

Like its competitors BNZ also wrote back a large chunk of its credit impairments, money put aside last year in case of large loan defaults due to the Covid-19 pandemic.

In March last year it had a $151m charge but this half that turned into a $17m writeback.

Loans and advances to customers rose 1.3 per cent to $90.7b while its deposits were up 1 per cent to $73.7b.

BNZ chief executive Angela Mentis. Photo / Supplied

Mentis said being at home so much during lockdown had seen many of its customers decide to undertake renovations.

"We've seen a 20 per cent increase in customers investing in renovations," she said.

Mentis said the BNZ assisted nearly 15,000 home-owners including supporting around 2,300 customers to buy or build their first homes over the six month period.