5 May 2011

BNZ profit up

1:43 pm on 5 May 2011

The Bank of New Zealand has reported a lift in its half year profit, despite an increase in bad loans due to February's earthquake in Christchurch.

The bank made an underlying profit of $283 million in the six months to March, an increase of 11% of the same period a year earlier.

Revenue rose 6% to $865 million due to higher margins from mortgage holders switching from fixed to floating rates, and higher lending fees to corporate and institutional customers.

It also kept a lid on costs, which rose 1% and included a $1 million donation following February's quake.

The quake also pushed up the amount set aside to cover potential bad loans, by 7% to $95 million, but it notes that underlying credit impairments improved slightly.

Lending growth was flat at $55 billion due to the weak housing market and firms repaying debt.

The bank lifted its share of the competitive retail deposit market to 18%, with deposits rising 10% to nearly $30.5 billion.

Meanwhile, BNZ's owner, National Australia Bank, returned a profit of $A2.4 billion - 16% more than the same period last year.

However, the ABC reports revenues were down 4.5% to $A8.29 billion.

NAB shares rose 2.5% to $A27.05 by 10:43am (AEST), while the other three major banks were down around 1%.