Transcript Kiwibank PPoint template JUNE12

MEDIA
BRIEFING
Financial Results – 30 June 2013
Topics Covered

Key Issues

Profit Performance

Balance Sheet Growth

Key Ratios

Capital Adequacy

Credit Quality

The Future
2
Key issues

The Kiwibank Banking Group achieved a profit after tax
of $97.1m for the year ended 30 June 2013, a 22.8%
increase on previous year’s profit of $79.1m

Continued growth in balance sheet since June 2012:


Lending increased 6.5% from $12.4bn to $13.2bn

Customer deposits increased 4.3% from $11.6bn to
$12.1bn

Customer growth continued and now about 850,000
Kiwibank has now been operating for 11 years
3
Key issues continued



Provisioning for bad debts


Raised $150m in term subordinated debt
reduced from $91m to $72m
Customer deposits account for 84% of all bank funding
Kiwibank’s credit rating revised from AA– to A+ by
Standard and Poor’s (the same rating as NZ Post)
CHF150m covered bond issue
4
Business Banking

We’ve built a business bank for SME’s with a full suite
of services and specialist products.

Our customer satisfaction and likelihood to recommend
are number 1 in the SME market.

As a result we have grown our customer base by over 8%
in the last year to over 34,500 in a market that is at
best flat.

Our current and future focus is to enable our customers
to spend more time on their business by making their
banking easy.
5
Wealth – Gareth Morgan Investments

Distribution of Gareth Morgan KiwiSaver (GMK) through
the Kiwibank/Post network

Build out of
appointments

Increasing Kiwibank/Post network sales from 3,500
in 2011/2012 to over 13,000 in the 2012/2013 year.



17% increase in GMK members
the
Investment
Strategy
Team
with
key
18% increase in FUM for GMI
GMK - winner
Choice Award
of
the
Workplaces
Savings
NZ
People’s
6
Insurance

Kiwi Insurance Limited continues the transition to full
in-house manufacturing capability for Life Insurance

Kiwi Insurance building a platform for profitable
growth while maintaining current profitability

Kiwi Insurance received a Financial Strength Rating of
A- (Excellent) from AM Best in September last year

Launched the innovative
October last year

Received a full licence from the Reserve Bank under the
Insurance (Prudential Supervision) Act 2010 this year

Continuing
to
Christchurch
“Life
facilitate
&
Living”
House
product
insurance
in
in
7
Canterbury

Tangible leadership in the regions recovery
continued lending and facilitation of insurance.

Transitional and bespoke lending solutions to assist
those in need and to accelerate the rebuild through
‘Canterbury Tools for Living’

Kiwibank’s local market share now estimated to exceed
12%

New Canterbury
rates.

Committed to the region with over 50 local community
based events and activities undertaken or financially
supported by Kiwibank in the last year.
lending
exceeding
pre-quake
with
growth
8
Awards and achievements

Global Finance Best Bank in NZ 2013

Sunday Star Times

Canstar Best Value Everyday banking Award

Highest level of customer satisfaction (Roy Morgan)

Most trusted bank brand (Reader’s Digest)
Bank of Year Award
9
Financial Performance – Profit &
Loss

Kiwibank increased net interest income and controlled
expenses resulting in profit after tax rising 23%
Dollars in millions
30 June
2013
30 June
2012
Net interest income
276
257
Other income
170
162
Total operating revenue
446
419
6%
(311)
(308)
1%
135
111
22%
(38)
(32)
97
79
Total expenses
Profit before tax
Income tax expense
Profit after tax
% growth
23%
10
Financial Performance-Historical
Summary
Dollars in millions
Financial performance
Interest income
Interest expense
Net interest income
Other income
Total operating revenue
Operating expenses
30 June 2013
30 June 2012
30 June 2011
30 June 2010
30 June 2009
790
773
720
564
649
(514)
(516)
(529)
(430)
(485)
276
257
191
134
164
170
162
162
168
149
446
419
353
302
313
(304)
(273)
(242)
(219)
(215)
(7)
(35)
(79)
(18)
(14)
135
111
32
65
84
(38)
(32)
(11)
(19)
(20)
97
79
21
46
64
Impairment allowances
Net profit before taxation
Income tax expense
Net profit after taxation
11
Financial Performance-Balance sheet
 Lending growth continues despite a static home loan
rate market
 Strong depositor support continues to maintain retail
funding ratio
30 June
30 June
Dollars in millions
Assets
Loans and advances
Wholesale & other assets
Total assets
Financed by:
Liabilities
Customer deposits
Securities issued & other
liabilities
Total Liabilities
Shareholder's equity
Total liabilities and
shareholder's equity
2013
2012
% growth
13,202
2,007
15,209
12,445
2,300
14,745
6%
12,120
11,565
5%
2,231
14,351
2,433
13,998
3%
858
747
15%
15,209
14,745
3%
12
Financial Performance (key ratios)
Ratios in percentage terms
Profitability measures
Net interest income/average interest
bearing assets
Net profit after tax/average shareholder's
funds
30 June
2013
30 June
2012
1.81%
1.8%
12.1%
11.7%
68.1%
65.1%
2.0%
1.9%
12.6%
11.3%
Efficiency measures
Operating expenses/total income
Operating expenses/average total assets
Capital ratios
Total capital ratio
13
Financial Performance-Capital
Adequacy
 Following the implementation of the more punitive
Basel
III regulations on 1 January 2013, Kiwibank’s capital
ratios remain strong and in excess of RBNZ required
minima

As at June 2013, Kiwibank’s Common Equity Tier 1 Ratio
was 8.4%, 3.9% above the required RBNZ minima

Total capital increased by
increase from 30 June 2012

Total capital ratio under Basel III was 12.6% at 30
June 2013

Kiwibank raised $150m of term subordinated debt in
December 2012, the first issue of Tier 2 qualifying
securities in New Zealand under the Reserve Bank’s new
Basel III rules, of which $108m can be recognised as
14
Tier 2 capital
$157m
to
$942m,
a
20%
Credit Quality (Impaired Assets)


The table shows total
impaired assets as a % of
gross loans and advances
from Disclosure Statements
dated 30 June 2012 and 2013.
Kiwibank remains favourably
placed against other banks
Impaired Assets of $54m
include all assets where
interest charges have been
suspended and a specific
provision has been raised.
Down from $84m in 2012.
Bank
Kiwibank
ASB
BNZ
Westpac
ANZ/National
30 June 30 June
2013
2012
0.41%
0.52%
0.72%
1.04%
1.14%
0.67%
0.47%
0.86%
1.61%
1.65%
Source: 30 June 2012 and 2013 Disclosure
Statements.
15
Credit Quality
Credit Provisions as a % of Gross Loans and
Advances
30 June

A key focus from
management and RBNZ is
the total credit
provisioning to gross
loans and advances
Bank
Kiwibank
ASB
BNZ
Westpac
ANZ/National
2013
30 June
2012
0.54%
0.34%
0.73%
0.92%
0.99%
0.73%
0.41%
0.86%
1.08%
1.26%
Source: 30 June 2012 and 2013 Disclosure
Statements.
16
The future

Roll out of new branch layouts for Post and Kiwibank
following North Shore (Auckland)and Kapiti pilots


Continued focus on helping customers switch to Kiwibank

Growth opportunities
Bancassurance

Consolidate market position as a bank of national and
strategic importance


Continued growth of Kiwisaver
Push harder to increase
medium enterprise market
in
market
the
share
in
insurance
small
business
and
–
Continued support of the Kiwibank New Zealander of the
Year and local heroes awards
17