KiwiBank delivers NZ Post a profit

Paul Brock.
Paul Brock.
Kiwibank substantially boosted its parent New Zealand Post's profit for the year ended June, with figures supplied to the market showing NZ Post would have barely broken even without the bank's contribution.

NZ Post reported a profit after tax of $107 million for the year, down from the $121 million reported at the corresponding time last year.

The profit last year was bolstered by a gain of $72 million from the sale of Datacom.

KiwiBank also reported an after-tax profit of $107 million, up 3% on the previous corresponding period, with the bulk of the profit made up by the banking group.

NZ Post did not provided detailed financial accounts to the Otago Daily Times, saying they would be released in the annual report being released in a month or so.

But it appears the $107 million of profit it reported came from the $107 million profit reported by KiwiBank.

NZ Post reported revenue of $1.66 billion for the period under review, down from the $1.69 billion received in the pcp.

Expenditure fell to $1.5 billion from $1.6 billon to give an earnings before interest and tax (ebit) of $187 million, up nearly 15% on the pcp.

NZ Post also reported an operating profit after tax of $124 million for the year, up 11.7% on the pcp.

That profit was driven by lower structural costs, growth in the parcels and logistics business and KiwiBank.

KiwiBank increased its interest revenue slightly to $798 million for the period, up from $790 millon.

Other income rose to $183 million but operating expenses increased by $40 million to $344 million.

Profit before tax was up slightly to $139 million.

NZ Post chief executive Brian Roche said the better operating performance was an encouraging validation of NZ Post's strategy so far as the group started rebuilding sustainable profitability.

Transformation from a traditional postal service business would continue and the group expected to make further progress this year.

For the first time in NZ Post's history, revenue from packages and parcels exceeded that derived from letters.

''This marks a significant moment for us and reinforces the need to make the changes we have embarked on.''

KiwiBank chief executive Paul Brock emphasised that the rising contribution of the financial services group to the performance of the NZ Post group.

Focusing on the bank's performance, Mr Brock said loans and deposits showed healthy growth with the bank lifting its share in key markets.

The bank increased loans and advances by 10.6% from $13.2 billion to $14.6 billion.

Customer deposits increased by 5.8% from $12.1 billion to $12.8 billion.

''This brings with it special challenges to ensure we maintain profitable growth as well as continuing to provide excellent customer service and that we operate where our customers are - both face to face and in an increasingly digital world.''

There would be about $100 million spent over the next four years on the bank's infrastructure, upgrading the core banking system.

Investor confidence in the bank was reinforced with a successful capital note offer in May.

The issue raised $100 million and contributed to a total capital ratio of 12.9% at the end of June, Mr Brock said.

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