Westpac NZ has revealed cash earnings of $1.01 billion in its 2021 full year result til the end of September.
That was an increase of $364 million or 56% compared with FY20.
It was primarily driven by a turnaround in impairment charges. Core earnings rose 9%.
Acting chief executive Simon Power said while Covid-19 was causing significant strain, economic activity in the year leading up to the latest outbreak had been very strong.
“Looking to the horizon, we’re optimistic increasing vaccination rates will reduce the impact of the virus on New Zealanders’ health and the economy,” he said.
Westpac NZ’s financial results were helped by changes in the level of economic concern from the pandemic.
“Last year we increased our lending provisions to $657 million to reflect the economic outlook from expected Covid-19 impacts,” Power said.
“The economy has performed better than expected and, as such, our lending provision levels have reduced to $525 million, representing 0.6% of our total lending portfolio.”
The company also reported a 9% lift in core earnings on the prior comparative period, arising from growth in lending and deposit volumes and a 3 basis points increase in net interest margins to 2.00%.
This was partially offset by increased spending on risk and regulatory compliance activities.
Power added Westpac NZ’s balance sheet was in good shape, and the bank was well placed to support households, businesses and the agri sector.
He added digital banking continued to increase in popularity, with 76% of customers now using Westpac online banking.
Mortgages have grown 10% and customer deposits have grown 7% for the year ending 30 September 2021.
Funds under KiwiSaver management increased by 14% year-on-year, to $9.1 billion as at 30 September 2021.