Government-owned New Zealand Post yesterday delivered
a much improved interim result for the six months ended
December but its subsidiary Kiwibank suffered from tight
margins, reporting a lower profit for the period.
NZ Post reported an operating profit of $94 million in the
period, up 19% on the $79 million reported in the previous
corresponding period (pcp).
The profit after tax was up 12% at $71 million.
Kiwibank's interim profit fell 10% to $72 million in the
period and its after-tax profit was down 7% to $52 million.
NZ Post will pay an interim dividend to the Government of
Chief executive Brian Roche said the overall improved result
was largely attributed to a reduction in expenditure of $32
million, which more than offset a $12 million fall in
''The steps taken were in line with the group's refreshed
strategy introduced in November. It's encouraging that the
strategic decisions we made last year are already starting to
The group had made a good start to the year and it was
determined to build on it, he said. NZ Post would balance
ongoing cost reduction with a strong focus on growing new and
profitable revenue and developing new ways to serve customers
and meet their changing demands.
The transformation plan, for the next three to five years,
focused the group on finding lower-cost ways of working to
manage the falling volume of mail coming into the network as
well as growing its logistics, parcels and financial services
businesses and delivering new products and services, Mr Roche
''Work is under way to develop new opportunities from the
growing e-commerce parcels market domestically and
Kiwibank continued to perform strongly in a highly
competitive market, amid tight lending margins.
The group would continue to invest in Kiwibank's
infrastructure to support its strategy for profitable growth
which included offering different types of products such as
insurance and fund management to its customers, he said.
Kiwibank chief executive Paul Brock announced the bank would
spend more than $100 million upgrading its core banking
The upgrade would take place over three to four years and
involved several IT providers and a banking system created by
Germany company SAP.
''We are looking to the future growth of the bank and to make
sure we have the right back office systems and infrastructure
to support our strategic plan.''
The core system upgrade project would take place
progressively to avoid any disruption to existing services,
Mr Brock said.
Kiwibank's balance sheet showed total lending (home loans,
business banking and credit cards) increased 5.75% from $13.2
billion to $14 billion in the period.
Customer deposits increased 2.4% from $12.1 billion to $12.4
Impaired assets to gross loans and advances improved from
0.41% in June 2013 to 0.28% at December 31.
Mr Brock said the result was satisfactory but fell short of
the ''excellent result'' last year as a result of tighter
lending margins and investment in the bank's infrastructure.
The accounts showed Kiwibank's operating expenditure rose
nearly 9% in the period to $160 million.