BNZ market share up - slightly

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Bank of New Zealand gained a smidgen more share of the mortgage market in the June quarter but its profitability is suffering slightly.

Wednesday, August 31st 2005, 8:06AM

by Jenny Ruth

The bank June quarter disclosure document shows its mortgage book grew by $656 million to $17.51 billion during the quarter, lifting its market share from 16.3% at the end of March to 16.34% at the end of June.

A year earlier, its market share was just under 16%.

However, net profit fell for a second consecutive quarter to $129 million from $131 million in the same quarter last year as operating expenses rose faster than operating income.

BNZ chief financial officer Mark Hosking says that partly reflects increased investment in the bank's brand and increased regulatory and compliance costs.

"We're really going well with volumes and income on the back of Unbeatable and the fact that we exited the mortgage broker channel," Hosking says.

The item he finds most pleasing in the latest results is that net interest income rose to $240 million from $226 million in the June quarter last year.

For the nine months ended June, net interest income was up 9.6% to $718 million while net profit was down $1 million at $394 million.

Westpac's June quarter document also released on Friday shows its profitability also suffered without the compensation of any mortgage market share gains.

Its net profit fell to $143 million from $155 million in the June quarter last year while its mortgage book of $20.8 billion meant its market share eased slightly from 19.44% to 19.42%.

Meanwhile, TSB Bank has also released its June quarter document which show it has been able to increase both its net profit and its share of the mortgage market. Net profit for the quarter rose 12.9% to $7.86 million while its mortgage book grew 6.2% to $1.39 billion, raising its market share from 1.26% at the end of March to 1.29% at the end of June.

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