FIPS Quarterly: March 2015

FIPS Quarterly: March 2015

Bank profits rise for the March 2015 quarter. The banking sector has recorded an increase in net profit after tax (NPAT) of $98 million for the March 2015 to a profit quarter of $1,249 million up from the $1,147 million of the December quarter and just below the record September 2014 quarter NPAT of $1,254 million.

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Across the sector, six of the nine participants actually recorded growth in NPAT.

John Kensington, KPMG Head of Financial Services, says, "The New Zealand banking sector has returned a very healthy result for the first quarter of the year particularly after allowing for the headwind the sector faced."

The increase in profits also comes against a background of intense competition for lending, a reduction of provisioning and positive volatility around the valuation of fair value through the profit or loss instruments.

Total assets have continued to grow to new record high levels of $412 billion across the sector, a 2.67% improvement on the December 2014 quarter. This occurred despite a fall in confidence in the New Zealand economy. The strengthening housing sector, in particular in the Auckland market, will have contributed to this growth, but it’s worth noting that the uncertainty in Europe around Greece and the ‘No’ vote, the slowdown in China, and the continued depressed dairy prices all create tension.

In addition, the further restrictions on lending will pose additional challenges going forward. The fall on the NZD has provided some relief late in the quarter. The real question will be what other impact will the Greek ‘No’ vote have on global markets and how will that impact a NZ economy that is slowing in all areas but the Auckland property market.

 

Key findings from the KPMG FIPS March 2015 quarterly include:

  • Net profit after tax (NPAT) $1,249 million, up $98 million from the December 2014 quarter
  • Total asset growth up 2.67% from the September 2014 quarter to $412 billion.
For more on the latest FIPS Quarterly, contact John Kensington.

© 2017 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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