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Last Article Uploaded: Friday, December 3rd, 9:22PM

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We're not average: Kiwibank's new boss

Kiwibank's new chief executive is keen to grow its share in the home loan market and is considering expanding distrubution through mortgage advisers.

Friday, August 24th 2018, 1:20PM

Kiwibank plans to turn around its sluggish home loan lending and may look to do more in the mortgage broker space.

The bank’s holding company. Kiwi Group Holdings, reported a net profit after tax (NPAT) of $122 million for the year ended June 30. The bulk of the profit was provided by Kiwibank which achieved a net profit after tax of $115 million.

Chief executive, Steve Jurkovich described it as a “solid” result with the star performer being its managed funds business.

Home loan lending was well below system growth at 2.7%. However, Jurkovich said the bank was determined to turn that around be be well above system.

Running at system growth level is being average, he says. "I don't think of Kiwibank as being average."

Jurkovich says he's "not a massive fan of being rater driven." Rather the focus was on things like turn around times, onboarding and supporting the right customers. He says the bank may expand what it is doing with mortgage advisers in the market place. He is "open-minded" to expanding third party distribution and said "I anticipate modestly expanding" what it does in this area.

Subsidiary, NZ Home Loans remains a big part of the the bank's operations and driving mortgage growth. 

Jurkovich said part of the reason that lending growth was done was due to the issues it had with the Reserve Bank regarding capital. The central bank determined last year that two bond issues did not qualify as regulatory capital.

Consequently the bank was conservative towards lending. 

Jurkovich said the bank is now well-funded, with around 85% of its book self-funding, which "sets us up nicely" to chase credit growth

During the financial year Kiwibank's loan book grew from $17.82 billion to $18.3 billion and customer deposits climbed from $15.98 billion to $16.17 billion.
Net interest income rose 12% to $419 million and its net interest margin widened to 2.06% from 1.92%, in line with those of the big four Australian-owned banks.

Jurkovich sees the government's Kiwibuild programme and first-home buyers generally as an opportunity, with a shortage of housing ensuring there's market demand at a time when prices are cooling in parts of the country.

Net interest income (NII) is up largely due to the cost of borrowing money improving. Bad debts were very low for the fifth year running, with net impairment losses of only $1 million for the year. This reflected a benign credit environment but also the quality of Kiwibank’s lending portfolio.

Tags: Kiwibank

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Lender Flt 1yr 2yr 3yr
AIA ▲4.60 3.65 4.35 4.69
ANZ 4.79 4.25 4.95 5.35
ANZ Blueprint to Build 2.03 - - -
ANZ Special - 3.65 4.35 4.75
ASB Back My Build ▲2.29 - - -
ASB Bank ▲4.60 3.65 4.35 4.69
Avanti Finance 4.55 - - -
Basecorp Finance 5.49 - - -
Bluestone 3.74 3.54 3.89 4.09
BNZ - Classic - 3.65 4.35 4.69
BNZ - Mortgage One 5.15 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Rapid Repay 4.95 - - -
BNZ - Std, FlyBuys 4.95 4.25 4.95 5.29
BNZ - TotalMoney 4.95 - - -
CFML Loans ▲5.35 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 3.59 4.09 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 5.25 4.00 4.60 -
HSBC Premier 4.49 2.19 2.45 2.69
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 4.15 3.29 3.85 4.19
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank ▲4.25 ▲4.54 ▲5.20 ▲5.54
Kiwibank - Offset ▲4.25 - - -
Kiwibank Special ▲4.25 ▲3.69 ▲4.35 ▲4.69
Liberty 4.84 - - -
Nelson Building Society 4.95 ▲4.29 ▲4.85 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.39 3.54 3.89 4.09
SBS Bank 4.79 3.65 4.19 4.25
SBS Bank Special - 3.15 3.69 3.75
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲3.45 - -
The Co-operative Bank - Owner Occ ▲4.75 ▲3.65 ▲4.35 ▲4.69
The Co-operative Bank - Standard ▲4.75 ▲4.15 ▲4.85 ▲5.19
TSB Bank 5.34 4.09 4.74 4.99
TSB Special 4.54 3.29 3.94 4.19
Unity 5.65 4.15 4.60 -
Wairarapa Building Society 4.99 ▲3.65 ▲4.05 -
Lender Flt 1yr 2yr 3yr
Westpac 5.09 ▲4.29 4.95 5.29
Westpac - Offset 5.09 - - -
Westpac Special - ▲3.69 4.35 4.69
Median 4.77 3.65 4.35 4.69

Last updated: 3 December 2021 8:16am

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