Westpac NZ strong and steady
Westpac New Zealand* has today announced a 22% increase in cash earnings to $707 million for the year ended 30 September, 2012.
The strong result maintaining both momentum and market share in a low growth environment saw a 10% increase in core earnings** driven by a 7% increase in net operating income. This, together with a 21% decrease in impairment charges led to the 22% increase in cash earnings.
Westpac New Zealand Chief Executive, Peter Clare, said the business continues to perform well and is well positioned to support growth as the economy lifts.
“We are a strong and sustainable bank, well managed with balanced growth, with a focus on the quality of our lending, and we continue to invest in ways to make things easier and simpler for our customers,” Mr Clare said.
“Through our local strategy we listen to our customers and organise ourselves around how we can best help. This approach has attracted more customers and helped build our relationships with existing customers as they choose to do more with us. This includes a 21% rise in customers with wealth products in this year alone.”
Our strong deposit growth of 11% has fully funded our loan growth of 3% and improved our deposit to loan ratio from 66% to 71%. This growth has been achieved through an increased deposit focus and ongoing innovation. This year we launched a 32 Day deposit for Institutional and Corporate customers that provides a better return for customers and provides us with a higher quality deposit base. The above system deposit growth was also assisted by an 11% rise in term deposits.
Home loan balances increased 3% in a very competitive market and business lending increased 4%. Our growth in home lending continues to out-pace the market.
Asset quality has improved across the board as both business and consumers focus on lower levels of gearing.
Agriculture was a strong performer with growth ahead of system delivering nearly half a percent of improvement in market share. We remain committed to supporting agriculture in New Zealand and our on-going investment into the sector will see 20 new frontline agri-bankers employed in the next 12 months.
Operating expenses rose 3% as a result of property, personnel and investment in technology including smart ATMs, online and mobile innovation.
Mr Clare said there is a disciplined approach to managing costs and a focus on simplifying processes to make things quicker and easier for customers. Online initiatives made available to all New Zealanders such as homeclub.co.nz and getonline.co.nz were designed to provide practical help even to non-Westpac customers. Westpac also became the first New Zealand bank to release a budget planner mobile app and is a key player in New Zealand’s largest trial of Near Field Communication payments. Further online and mobile innovations are planned for FY13.
“We have seen a six-fold increase in the uptake of mobile banking over the last half of the year and there is now in excess of 1.2 million log ons and transactions via mobile per month. It is clearly a channel customers want to use and we will continue to listen to them and meet their needs,” Mr Clare said.
On-going investment was also made in branches and an additional 42 smart ATMs that allow 24/7 banking, cash and cheque deposits in real time and provide fee benefits to users were installed.
Westpac continued to provide practical help and leadership in Christchurch including, most notably, breaking the insurance impasse that had delayed many Cantabrians from rebuilding their homes. It also committed to returning to the CBD as part of the city’s redevelopment plan. During the year more than 100,000 people used the Westpac Business and Community Hub that continues to provide free services and facilities for dislocated businesses.
During Westpac’s 151st year of operations we concluded our first four year sustainability plan. Amongst a range of milestones it included collecting one million pieces of rubbish from our beaches, assisting over 63,000 New Zealanders with Managing Your Money workshops, and helping out in communities across New Zealand with 14,685 staff volunteer hours. We have also commenced a new national blood drive for our staff as a ‘Partner for Life’ with NZ Blood Service.
“As a large organisation in New Zealand we are very conscious of the opportunity we have to help our country grow and prosper. For our customers and our communities ‘Help is what we do’. We are helping them answer their financial questions, and, through this dialogue, we hope all New Zealanders gain confidence to save and invest for the future we all desire,” Mr Clare said.
Looking ahead, global uncertainty continues to impact the decisions of New Zealanders. Consumers have continued deleveraging as have many businesses who remain focused on strengthening their balance sheets rather than investing now for growth.
“The New Zealand economy is well placed for growth compared to many others around the world. The key now is moving from caution to confidence and investing for future growth,” he said. “Westpac is here to help with that too”.