Kiwibank profits drop by 47%

The retail bank, led by Steve Jurkovich, saw net profit after tax fall to $57 million, a 47% drop on the prior year, it confirmed today. 

Jurkovich blamed the fall on Covid-19 impairments and increasingly low interest rates.

Impairments, bad loans, hit $51 million, up from $12 million in the year before. 

Operating expenses also increased from $375 million to $428 million, the lender confirmed. 

Kiwibank said it continued to grow at a faster rate than the market, with lending growth of 9% and deposit growth of 13% in the financial year. "The market grew at a slower pace of 5% and 9% respectively,” Jurkovich said.

"We are growing our lending and deposit rates faster than the market to help more New Zealanders into homes, more Kiwis to save, and support more businesses – living up to our purpose of Kiwis making Kiwis better off," Jurkovich added.

The Covid pandemic is also believed to have slowed Kiwibank's plans to roll out mortgage distribution through the adviser channel.

Before the crisis hit, Jurkovich told TMM Online of plans to launch a fully-fledged broker unit later this year.