Kiwibank a national success story: CEO

The Dunedin North New Zealand Post and Kiwibank in Great King St.
Kiwibank is being touted as one of New Zealand's success stories by its chief executive Steve Jurkovich.

Releasing the company's financial results for the year ended June, Mr Jurkovich said the bank was 100% New Zealand-owned, and its profits stayed in the country.

"New Zealand ownership of Kiwibank means robust, local accountability. These results indicate a reliable and sustainable bank, with a mandate to keep innovating."

Kiwi Group Holdings is made up of the Kiwibank Banking Group and associated wealth management, insurance and lending businesses.

While Mr Jurkovich focused on the underlying profit rising to $126million in the year ended June from $122million in the previous corresponding period (PCP), the financial statements indicate a far better picture.

Revenue for the period was up from $831million in the PCP to $979million in the current period.

Interest expense was held tightly at $468million from $464million, giving net interest income this year of $411million from $368 million.

The group's profit before tax more than doubled to $154million from $71million last year, as did the reported profit of $115 million, up from $53million last year.

Kiwi Wealth, New Zealand Home Loans and Kiwi Insure had all grown their businesses. At the end of the financial year, the wealth division managed $5.5billion of customer funds and more than 198,000 KiwiSaver accounts. It had since broken the 200,000 mark.

Kiwibank was committed to doing the right thing by customers, Mr Jurkovich said.

"The real story is Kiwibank has significantly reduced fees for personal customers. This has been done through either dropping or removing fees altogether. Our personal banking customers are paying less for their banking than ever before."

A key area for the bank was first home buyers, and Kiwibank had recently announced it would pre-approve loans requiring only a 10% deposit of the value of a KiwiBuild home for qualifying customers, and contribute $2000 to moving or legal expenses, he said.

As financial institutions faced increased scrutiny and more competition, it was vital Kiwibank continued to build on the trust of its customers, he said.

NZ Post

New Zealand Post's business continues to evolve as people post fewer letters but send more parcels.

The state entity yesterday reported a profit from continuing operations of $13 million for the year ended June, down from $27million reported in the previous corresponding period.

Continuing operations represent NZ Post's core business plus its 53% share of Kiwi Group earnings from November 1, 2016 to June 30, 2018.

Chief executive David Walsh said the expected decline in letter revenue had proved challenging in this year's results.

More than 63million fewer letters were delivered, representing a 12% fall in volume and 11% fall in revenue.

More than 7million more parcels were delivered, representing a 10% rise in volume and a 7% increase in revenue.

"NZ Post typically now delivers 1.2 million fewer letters every week, which led to a significant financial impact as we continued to operate a nationwide network for New Zealand."

If the current rate of decline continued, in four years' time NZ Post would be delivering half of the volume it did today, he said.

The state-owned enterprise was taking its social responsibilities seriously, balanced with the need to operate a sustainable business.

NZ Post was responding to the reduction in demand in several ways so the service could be maintained for communities and businesses alike, Mr Walsh said.


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