Westpac New Zealand has followed the lead of two of its competitors by reporting yesterday an improved cash profit for the six months ended March 31.
Westpac's profit of $462 million was up 2% on the previous corresponding period and 6% higher than for the six months ended September.
Operating income fell 1% to $1.1 billion on the pcp and core earnings fell 4% to $610 million.
Across the Tasman, the parent Westpac Corporation increased its first-half profit 3% to $A4.02 billion ($NZ4.31 billion) but said the demand for housing credit helping lift its consumer bank was likely to slow.
Cash earnings from Westpac's consumer bank were up 5% for March at $A1.5 billion as total loans grew 6% and deposits by 7%.
Westpac New Zealand chief executive David McLean said an improving New Zealand dairy sector and continued underlying growth contributed to a strong asset portfolio and impairments of $45 million improving on the pcp.
Lending growth of 7%, including home lending growth of 6% and business lending growth of 8%, were supported by term deposit growth of 11%. Overall deposit growth was 3%.
``The bank is maintaining its focus on quality lending and targeted growth in a challenging environment with increased pressure on deposit and wholesale funding challenges.
``We are seeing growth in positive sentiment and market share in key segments.''
Westpac NZ's campaign to support first-home buyers through the relaunch of its Home Saver offering aligned with a steady increase in withdrawals from the Westpac KiwiSaver scheme by first-home buyers, he said.
At the same time, funds in the Westpac KiwiSaver scheme increased 20% in the past year and the average balance increased from $5800 in December 2010 to $11,400 in December 2016.
The customer-centric strategy was coming to life through reduced banking fees, one of several changes contributing to an 18% drop in customer complaints compared with the same period last year.
``We saw growth in targeted market sectors, including Auckland and millennials. It is good to see continuing recovery for many of our dairy farming customers, which is reflected in our significantly improved impairment position.''
At the same time, the bank experienced reduced net interest margin, a result of strong lending competition and increased funding costs, Mr McLean said.
Westpac was in its second year of a three-year programme to enhance its customer service and continued to introduce new services.
In the past six months, the bank had improved its self-service offerings. ATMs now offered both coin selection and note-denomination options and since last September, 84,000 customers had downloaded the cash management app.
