The Bank of New Zealand (BNZ) said today its September year net profit has risen 15 per cent to $605 million.
The Australian-owned bank, which has long battled low to mediocre customer satisfaction levels, said a lift in satisfaction to a 10-year high combined with innovative new productsand tight control of margins and costs were behind the profit increase.
"It's a first-class result, and I'm very pleased," managing director Peter Thodey said.
The BNZ's parent bank, National Australia Bank, posted a record annual profit of almost A$4.4 billion ($5.1b), up 10 per cent.
Despite it running an aggressive campaign to win market share in the mortgage market, BNZ said its margins only fell 6 basis points.
Mr Thodey said he was cautious on the outlook for the coming year.
"While this year's result is an improvement on our achievement in 2005, it includes a significant one-off gain from the sale of Custom Fleet," he said.
Without the one-off the profit was only up 7.7 per cent.
"New Zealand remains a difficult market and the outlook for growth in underlying profit is more modest," he said.
"Market conditions over the past twelve months were extremely competitive across all sectors, with inevitable pressure on interest margins.".
Bank of New Zealand held or grew its share of key markets during the year with growth in youth share particularly pleasing, he said.
He said the collapse of several finance companies in recent months was of concern and "it is important that investors understand the relationship between interest rate and risk".
