Finance sector profits booming
Accounting firm KPMG’s annual Financial Institutions Performance Survey (FIPS) found that bank profits had increased by 13.6% to just under $3.7 billion in the year to September 30, the result of improved lending margins and a reduction in impaired assets.
Lower funding costs saw banks achieve a net interest margin of 2.25% over the year, up from 2.22% in 2011.
The improved margin contributed $288 million towards the profit increase; meanwhile, lending assets grew by 3.2% and impaired asset expense reduced by 25.7% due to improved credit quality and a reduced number of delinquencies.
Kiwibank was the best performer with a 272% profit increase from $21 million to $79 million, while ANZ (16.6%), ASB’s owner CBA (19.3%) and Westpac (13.96%) also had good increases; BNZ, on the other hand, had a 13.6% profit decrease.
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