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BNZ banks on brokers

BNZ has produced a “very strong” result in the six months to March 31, with net profit up almost 28% to $502 million for the period. Chief executive Anthony Healy talks to TMM Online about BNZ's plans to return to the broker market after a 12-year absence.

Thursday, May 7th 2015, 5:13PM

The bank hasn’t grown market share across its home loan and deposit books but has managed to increase income.

BNZ chief executive Anthony Healy said the “very strong result is a result of our focus on the core franchise.”

He said there has been good and careful cost management which has seen the cost to income ratio fall from 40.2% to 39.4%

“The cost to income ratio is in a good space,” he said.

BNZ’s net interest margin was up from 2.34% in September to 2.41% in this period even though more customers had moved to fixed rate home loans which had lower margins.

Overall its lending margin had come down 13 basis points because of competition from other banks, but that had been offset by by funding benefits that includes rolling off some of the expensive GFC funding and repricing some of the lower quality deposits.

“Our earnings on capital have improved that’s probably the single biggest thing that’s driving the margin improvement,” chief financial officer Adrienne Duarte said.

She said in a rising interest rate environment the bank earns more on its capital, and BNZ had “picked the right time to move from two year to three year investment rate.”

Total housing lending rose from $30.6 billion to $31.4 billion however its share of the market remained flat at 15.8%.

Healy said that is a good result as the bank was only competing in 75% of the market. As it moved into the broker space he expected to see the bank’s market share increase.

However he would not put numbers around how much it is forecast to grow.

Healy said he expects BNZ’s recent re-entry into the mortgage broker market to boost the bank’s home loan performance, and to position the bank strongly in the high-growth Auckland market.

“We know that 25% of customers choose to use a broker, so our decision made strategic and commercial sense. It extends our reach and will enhance BNZ’s capacity to help more New Zealanders to buy their own home.”

He said BNZ was “skewing investment to Auckland where there’s more growth and we are a bit under our natural share in Auckland.”

Around 40% of BNZ’s mortgage portfolio was in Auckland and Christchurch comes in at 15%.

The portion of lending to the over 80% LVR market has shrunk significantly from $5,049 million in September 13 to $3,403 million which represents 10.5% of its overall book.

Tags: Anthony Healy BNZ

« Chinese banks creeping into lending marketMore banks call for OCR cuts »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 15 November 2019 4:16pm

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