Kiwi Group Holdings, which includes Kiwibank, associated wealth management and insurance companies, and New Zealand Home Loans, reported an after-tax profit of $132 million for the year to June 30.
The bulk of that came from Kiwibank, which reported an after-tax profit of $127 million, up 27% on the year before.
Chief executive Paul Brock said the result was driven by a focus on more profitable and diversified revenue growth, backed by solid performance in mortgage lending and customer deposits, combined with a strong improvement in credit performance.
Kiwibank increased revenue by 18.3% to $400 million, increased loans and advances by 6.6% to $14.6 billion, and increased customer deposits by 7.8% to $12.8 billion.
It increased its home loan book by $1 billion in what the bank said was a very competitive market, with high levels of switching. Over the year, 4000 borrowers switched their home loans to Kiwibank.
It has 7% of the mortgage market and is predicting another $1 billion growth over the next year.
Brock said the bank was now at an important stage of its growth. “We have about 900,000 customers in what is a very competitive market. That equates to one in four New Zealanders with a bank account having an account with Kiwibank.”
He said: “While we continue to attract more customers, the way they interact with us is rapidly changing with around 89% of all our service transactions already being completed via digital channels. Changing customer needs means that the focus for the future lies in continuing to innovate to transform the Group into a digital business resulting in digitally-enabled sales supported by our people.”
He said that would mean fewer branches but could not say how many fewer.
Brock said the small business and wealth management markets were key to the country’s prosperity and would be a focus area for growth.
The total number of Kiwi Wealth KiwiSaver scheme members increased to 137,000 by June 30.
