Chief Executive, Peter Clare, said it was a strong all round performance in a highly competitive environment. The result was driven by a modest increase in revenue, disciplined expense management and a focus on improving asset quality and balance sheet strength.
“We have maintained a disciplined and targeted approach to implementing our strategy, with a focus on improving the quality and strength of our balance sheet. We continue to build a strong and sustainable business centred on the customer,” Mr Clare said.
The improvement in asset quality was a highlight of the year reflecting both our targeted approach to lending and the ongoing uplift in the New Zealand economy. Both have contributed to a 39% reduction in impairment charges.
Overall lending increased 4% over the year with strong growth of 7% recorded in drawn and undrawn mortgages with a loan-to-value ratio below 80%. Additionally, business lending rose at system whilst stressed assets reduced.
Deposits grew a very strong 11% which more than fully funded loan growth for the year and led to an industry leading deposit to loan ratio rising almost 5 percentage points to 76%.
There was continued good progress in building deeper relationships with our customers. The number of MyBank customers grew 4%. Funds under management and administration in our wealth business grew strongly, up 21% to $5.8 billion, with over $2 billion in KiwiSaver investments.
“We continue to invest in simplifying our business to make banking easier and faster for customers. The advances we have made in our digital and mobile channels in 2013 are designed to meet the changing way people bank allowing our consumer and business customers to bank everywhere, all the time,” said Mr Clare.
The innovation in our digital offering is also encouraging its greater use with the number of customers using mobile banking applications rising by two and a half times. It is clear that customers are keen to do their banking on the move with a quarter of all online transfers and 10% of all online payments now initiated via mobile digital means.
Westpac New Zealand will be the first bank in New Zealand to launch a fully responsive online banking platform that delivers customers consistent functionality on any on-line and/or mobile device. This will enable us to develop and deliver new and innovative services more rapidly to customers. It also facilitates consistency of interface which customers love.
“Customers are driving a revolution in banking with the incredible speed with which they are taking up new self serve technology. It is essential that we respond to meet, and exceed, their expectations,” said Mr Clare.
“Our fully responsive flexible on-line/mobile platform, supplemented by smart and innovative digital mobile applications, will put us in a leading position to meet these demands,” Mr Clare continued.
Westpac’s investment in new format branches and Smart ATMs is continuing. These channels provide 24/7 banking and many of the services traditionally done in a branch including cash and cheque deposits in real time and the provision of change.
Another 50 Smart ATMs were installed across the country during the year bringing the total to 115. This covers more than half of Westpac New Zealand branches. These new machines now accept nearly a quarter of all our physical deposits with one in three of these transactions occurring outside traditional branch hours.
Mr Clare said: “I am incredibly proud of the Westpac team and the balanced result we have achieved this year. We are well placed to grow in the coming years and support all of our customers for all of their needs through the channels of their choice.”* Westpac New Zealand is a management divisional view only, and is not the same as Westpac New Zealand Limited. The financial results of Westpac New Zealand Limited will be available in the Disclosure Statement.