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.
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.
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