Westpac New Zealand has delivered a solid result in an environment where core earnings were flat and high levels of competition continued to compress margins, the bank announced this morning.

Core earnings for the 12 months ended 30 September 2017 saw a 0.3% decrease on the same period last year, but the overall result was boosted by a $135 million improvement in impairments as the dairy sector continued to recover.

Westpac NZ CEO David McLean said the result reflected a strong economy and was supported by good credit quality, with the bank continuing to focus on enhanced customer service, quality lending and targeted growth in key sectors.

Home loans grew 4% and Business lending was up 0.7% over the past year, supported by customer deposit growth of 1.6% in a competitive market.

“We are continuing to focus on helping our customers and the New Zealand economy grow and we are investing in our business to improve the banking experience.

“Customers are taking advantage of today’s low interest rates by making extra mortgage repayments, building savings buffers and entering the property market.

“Over the last 12 months, we have reduced or removed 11 of our banking fees in direct response to customer feedback, lowered customer complaints by 21% and introduced a range of innovative products and services to make life easier for customers.

“We are experiencing strong momentum across the digital side of our business with sales through digital channels up 22% across the year and more customers than ever becoming digitally active.

“A continuing focus is supporting customers to save, in line with our savings bank heritage. We’ve lifted term deposits by 3% year-on-year, and the Westpac KiwiSaver Scheme is continuing to grow allowing many New Zealanders to buy their first home, and save for a comfortable retirement,” McLean added.

Funds in the Westpac KiwiSaver Scheme increased by 19% ($837m), from $4.4bn to $5.2bn as at 30 September. During the same period, the number of Westpac KiwiSaver Scheme accounts increased by more than 2% (8,468) and the average balance increased from $11,300 to $13,200, up 17%.

“We’ve also stepped up our programme of proactively contacting default fund customers to check they are in the best fund for their needs. We’re pleased to have achieved the highest percentage of default to active choice conversions of all banks in 2017 and will continue with this focus to help our customers make better investment decisions.

“We’ve continued to support our farming customers through investment in more front line rural bankers. This has seen an increase in our agri-business lending and deposits of 4% and 17% respectively against the prior year,” McLean said.

Source: Nzadviseronline.co.nz