Chief executive discusses figures, lockdown support
Kiwibank has released its full year results, and has recorded a net profit after tax of $126 million.
Overall net lending was up by $3 billion, residential mortgage lending grew by $2.2 billion, and business lending shot up significantly by 51% ($0.8 billion).
Chief executive Steve Jurkovitch (pictured) said that the bank had re-emerged strongly from a significantly more challenging 2020, and is now looking to make investments into various areas of its business, and particularly into its interactions with the adviser market.
“It’s a strong bounce back from what was a really tough year last year,” Jurkovich told NZ Adviser.
“It was a really balanced result - we did well in housing, we did well in business lending and in deposits. We’ve invested more into tech than we’ve ever done before, we’re growing our reach into the adviser market, and we still have some more work to do there.”
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Jurkovich noted that Kiwibank had also become B Corporation certified in the last year, along with getting re-accreditation for both the Rainbow Tick and the Gender Tick. He also highlighted the strong business banking result, and said the bank would continue to focus on this area going forward.
“We think the backbone of Aotearoa New Zealand are small and medium businesses, and some are doing it tough right now,” he said.
“The percentage is quite flattering this year because we’ve been a much smaller business bank, but if you have a look at the market, there has been very moderate business banking growth from most of the big banks. So, I do think that they have switched their appetites to housing, and we think there’s an opportunity to show that we’re interested in business banking and being on the front foot, and that’s been really supported by customers.”
When it comes to the Alert Level 4 lockdown, Jurkovich said that enquiries around support measures had been minimal so far, and there seems to be little demand for a return of mortgage holidays and payment deferral schemes.
“We’ve only had a trickle of enquiries at the moment, just a few dozen calls. That’s really different to last year, and that really does show that people have adapted,” Jurkovich said.
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“Level 4 is obviously different, and we won’t know the full impact until next week - for Auckland, a lockdown of six weeks would be different to a lockdown of a couple of weeks. It is too early to say, but, compared to last year, we’ve had a much lower volume of calls.”
“This also shows that lots of people deferred their loan payments last year when they didn’t need to, and so they don’t actually want to do that unless it’s necessary, as it adds interest costs to your borrowing,” he continued.
“It’s a balancing act. Packages will be available, and we will support people where we need do, but it really is driven by customer demand, and at the moment there just isn’t any.
“Of course, it’s a very volatile situation, and if the situation changes, we’ll change with it. But the great thing about a result like this is that it puts money in the pot to support people where they need it - so if we need to do that again, we will.”
