Category: Media updates

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The economy in ten pics

Source: BNZ statements

  • RBNZ kickstarts the easing cycle
  • Greenlights a slow ‘n’ steady downtrend
  • Helps the 2025 economic outlook, but near-term growth picture still troubled
  • With labour market to weaken further
  • Housing market in focus

 

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Chart 1: So it begins

There was nothing in the Reserve Bank’s (RBNZ) announcement to greatly challenge our view of the world. The Official Cash Rate (OCR) was lowered 25bps to 5.25% as we expected. The interest rate brake is still on, just less so than before.

The most important aspect of the meeting in our view was the confirmation that the OCR will move a lot lower over the coming 18 months.

It needs to. Our rough estimate of the ‘real’ (inflation-adjusted) cash rate has increased in recent months, even with this week’s cut. And it’s a long way down for the OCR to the RBNZ’s estimate of the long-run neutral rate around 3%.

Chart 2: Chop

The RBNZ’s updated forecasts were a shadow of their former selves. GDP growth, inflation and OCR forecasts got a chop while unemployment rate expectations were lifted ½% or so to a 5½% peak.

This brings the RBNZ’s view of the economy down to, or even a touch weaker than, where we’ve been seeing things. Importantly, CPI inflation is now seen well inside the 1-3% target range in Q3 (2.3%y/y from 3.0% in May). As of yesterday, we concur.

It means there’s a higher hurdle for incoming data to surprise the RBNZ on the downside. That doesn’t rule out a larger 50bps OCR cut being deployed at some point, but it does lean against the possibility in the short term.

Chart 3: Joining the rate race

Having been something of an outlier for a while, NZ is now back in the policy easing peloton. Most developed markets anticipate sizeable interest rate cuts over the coming 12 months.

Markets price a better than even chance of a 50bp start to the US Federal Reserve’s easing cycle next month which, if delivered, may embolden global rate cut pricing further.

Of those markets covered opposite, implied policy easing to February 2025 is most aggressive for the US (-185bps), NZ (-150bps), and Canada (-130bps), with Australia (-65bps) and Japan (+10bps) at the other end of the field.

Chart 4: US sniffles

Global financial markets have recovered much of their poise following the steep equity market declines of early last week. Sentiment is not what it was though. Investors are suddenly alert to any number of global fragilities.

Most of the ‘blame’ for the wobble has been pinned on cooling tech/AI exuberance and US growth concerns. The outsized reaction last week may reflect the additional, creeping reliance on the US to drive the global expansion this year. The old ‘US catches a cold’ adage is still relevant.

Chart 5: Jobs growth stalled

The number of people employed nudged up 0.4% in the June quarter, according to official figures released last week. We’d pencilled in a small decline. Unemployment still rose to 4.6% as expected.

Q2’s employment kick is unlikely to be repeated this quarter, and it also doesn’t change the broader narrative of jobs growth effectively stalling around mid-2023.

Amongst the sectoral detail, it’s clear that the construction sector has been at the vanguard of the changing employment market.

Chart 6: Relocating for work

The lift in NZ’s unemployment rate in Q2 maintained a ½ percentage point gap to the (4.1%) Aussie equivalent.

It doesn’t sound large, but that gap is the widest since 2013. Not coincidentally, net migration outflows to Australia are also running at the strongest level since 2013. People move to where the jobs are.

Our forecasts imply both trends have got a ways to run. A climb in the NZ unemployment rate to a 5.5% peak in early 2025 against a lower (4.6%) peak in Australia would, on past form, be consistent with an acceleration in net outflows.

Chart 7: Green f(lags)

Wage inflation peaked in NZ about a year ago. We saw another notch in the downtrend last week. The private sector Labour Cost Index eased to 3.6%y/y in June, down from 3.8% the prior quarter and the 4.5% peak.

More of the same easing is expected over the coming 12 months. It’s something that should help drain still-elevated domestic services inflation pressure. So, it’s not that high interest rates have been ineffective on non-tradables inflation, it’s that the impacts take time to turn up. The lags are real!

Chart 8: No retail respite

The trend in NZ retail card spending abruptly turned in early 2023, and it’s been downhill ever since. July’s 0.1%m/m contraction was the 6th consecutive monthly decline. Discretionary categories remain the hardest hit.

The weakness is even more pronounced once buoyant population growth is accounted for. Our estimate of the average monthly spend per (working age) person is 8% below March 2023 levels. It’s a deeper and longer contraction than during the 2008 GFC.

We’re hopeful the downtrend soon stabilises. Tax and interest rate cuts are supports, but falling population growth and job security are not.

Chart 9: Housing market in focus

The release of July REINZ housing market numbers has been shunted out to Tuesday, thus missing the cut for this edition of TEITC.

But, it’s fair to say, housing stats will be watched more closely than usual as folk scour for green shoots in a sector likely to be one of the earlier responders to (recent and expected) falls in retail interest rates. There are stirrings in some of the anecdote and surveys, but we think the prognosis is more stabilisation than acceleration, for now.

In the least, we’d expect a hearty bounce-back in July sales activity following the outsized, Matariki holiday-related, drop in June. That’s what we saw from this week’s Barfoot & Thompson figures covering a share of the Auckland market.

Chart 10: Food for thought

Food prices lifted 0.4%m/m (seasonally adjusted) in July. Prices have been flattish for the past year, but they’re still up 24% on 2020 levels.

As you’d expect, there’s been a fair bit of variation amongst the components over that time. If you’re partial to an omelette and/or yogurt for breakfast you will be feeling the pinch a lot more than some. At least your morning brew is still, relatively speaking, cost effective.

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Disclaimer: This publication has been produced by Bank of New Zealand (BNZ). This publication accurately reflects the personal views of the author about the subject matters discussed, and is based upon sources reasonably believed to be reliable and accurate. The views of the author do not necessarily reflect the views of BNZ. No part of the compensation of the author was, is, or will be, directly or indirectly, related to any specific recommendations or views expressed. The information in this publication is solely for information purposes and is not intended to be financial advice. If you need help, please contact BNZ or your financial adviser. Any statements as to past performance do not represent future performance, and no statements as to future matters are guaranteed to be accurate or reliable. To the maximum extent permissible by law, neither BNZ nor any person involved in this publication accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any, opinion, information, representation or omission, whether negligent or otherwise, contained in this publication.

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Money Month 2024: BNZ survey reveals retirement concerns

Source: BNZ statements

A BNZ survey has highlighted the importance of financial education as Sorted Money Month 2024 begins. Coordinated by Te Ara Ahunga Ora Retirement Commission, the annual campaign aims to equip New Zealanders with education, resources, and tools to better navigate their financial journey.

The survey* uncovered some significant concerns about retirement preparedness:

  • Nearly four in ten (39%) respondents aren’t confident they’ll have saved enough for retirement
  • One quarter lacked confidence in making investment decisions, with younger people (aged 25-44), lower-income households, and non-homeowners particularly affected
  • 74% felt they can’t rely on NZ Super for their retirement, including those who believed it won’t provide sufficient income, or had concerns it may change in the future

Anna Flower, Executive, Personal and Business Banking at BNZ, says, “These findings highlight the importance of financial education and early planning. Money Month is an opportunity for people to take that crucial first step towards financial preparedness.”

Continuing and building on last year’s theme “Pause. Get sorted,” Money Month 2024 focuses on actions to help people grow their money and build resilience.

“Understanding concepts like compounding interest and starting your savings journey early – even with small, regular amounts – can significantly enhance financial outcomes,” Flower says.

The survey also highlighted KiwiSaver’s role in long-term financial health, with 89% of respondents enrolled. However, 16% revealed they aren’t making regular contributions, highlighting the need for ongoing education and engagement.

“People think investing is for the wealthy, but investing is for everyone, and KiwiSaver is the easiest and most accessible way to get started,” Flower says.

“For those not contributing, it’s important to understand that you could be leaving money on the table. With KiwiSaver, in addition to your own savings, you can benefit from both government and employer contributions. These additional contributions can make a real difference to your savings over time, helping put you in a much stronger position for retirement or buying your first home.”

Supporting your goals

While Money Month shines a spotlight on financial health, BNZ is committed to supporting financial wellbeing throughout the year.

“Our free Banking Reviews are designed to align customers’ banking with their financial goals and enhance their overall financial health,” Flower says.

These reviews involve building a comprehensive understanding of an individual’s financial goals and needs – from day-to-day transactions to borrowing, investments, and insurance. This holistic approach allows for tailored advice and personalised recommendations to support overall financial health.

“Our experts are always here to discuss your savings goals, advise on home loans, or help you use our BNZ KiwiSaver Scheme Navigator to understand how to get on track with your retirement savings. These reviews ensure that banking solutions work for what’s important to customers now and in the future,” she says.

In addition, BNZ offers a range of online tools and resources to help New Zealanders take control of their finances. The BNZ app’s Activity tab enables customers to track their spending, categorise transactions, and manage cashflow across personal accounts. For homeowners, the MyProperty tool provides insights into home loans, allowing users to explore scenarios like changing repayments or assessing the impact of different interest rates and what impact this may have on their mortgage free date. These digital tools, along with comprehensive calculators and other resources, support customers in making informed financial decisions.

“Don’t let another year pass without taking charge of your financial future. Whether you’re just starting out or looking to optimise your investments for retirement, now is the time to act. Small steps today, like ensuring you’re making the most of your KiwiSaver or booking a Banking Review, can lead to meaningful improvements in your financial well-being tomorrow.”

For more information on Money Month initiatives and to access financial resources, visit www.sorted.org.nz

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BNZ welcomes changes to affordability rules

Source: BNZ statements

BNZ welcomes changes to the Credit Contracts and Consumer Finance Regulations and an update to the Responsible Lending Code.

The changes, announced by Commerce and Consumer Affairs Minister Andrew Bayly, are designed to give lenders more flexibility in how they assess consumer loan affordability, while still ensuring responsible lending practices.

James Leydon, GM Home Lending Product says, “At BNZ, we’re committed to supporting our customers’ financial aspirations. Whether you’re buying your first home, upsizing for a growing family, or undertaking your dream reno, we’ll be able to assess your loan application with more flexibility, in line with the updated Responsible Lending Code.

“By giving lenders more flexibility in assessing loan affordability, we can better serve New Zealanders. This approach ensures that creditworthy customers aren’t unnecessarily held back by prescriptive affordability requirements. This will help unlock opportunities for many, without compromising our responsible lending obligations.

“We look forward to implementing these changes promptly when they take effect on July 31st, ensuring our customers can benefit from a more streamlined lending process as soon as possible.”

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BNZ offers support for East Coast and Hawke’s Bay customers impacted by severe weather

Source: BNZ statements

BNZ is offering targeted support for customers affected by severe weather and flooding in Hawke’s Bay and the East Coast.

“We recognise that some of our customers may be facing unexpected challenges due to the severe weather,” says Anna Flower, BNZ Executive Personal and Business Banking.

“As they focus on the clean-up and recovery, we want to offer practical support to help relieve some of the financial pressure during this time.”

Available immediately, BNZ is offering a range of targeted assistance options for affected customers on a case-by-case basis, from access to temporary overdrafts for both personal and business customers to the ability to review home lending facilities.

“There are also a range of other options available, especially for customers who are facing hardship, so I encourage people to get in touch so we can see how we can help,” she said.

Business and agribusiness customers should reach out to their BNZ Partner. Small business owners can call 0800 BNZSME, while personal banking customers can access support through BNZ’s digital platforms or by calling 0800 ASKBNZ.

BNZ PremierCare Insurance customers who need assistance can call IAG NZ on 0800 248 888 or submit an online claim https://iagnz.custhelp.com/app/bnz

 

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BNZ latest big name to invest in AgriZeroNZ

Source: BNZ statements

Bank of New Zealand (BNZ) is the latest business to join the growing lineup of private sector companies backing AgriZeroNZ, alongside government, to get emissions reduction tools into Kiwi farmers’ hands sooner.

Announcing the new shareholder today, Hon Todd McClay, Minister for Agriculture & Trade, confirmed the government would match BNZ’s $4 million investment, boosting AgriZeroNZ’s funds by $8milllion to total $191 million.

BNZ joins The a2 Milk Company, ANZ Bank New Zealand, ANZCO Foods, ASB Bank, Fonterra, Rabobank, Ravensdown, Silver Fern Farms and Synlait with a combined 50% shareholding of the joint venture (JV). With the government’s increased investment, it owns the remaining half through the Ministry for Primary Industries (MPI).

AgriZeroNZ Board Chair, Sir Brian Roche KNZM, says this provides a welcome boost in funds to achieve the JV’s ambition and maintain the multibillion-dollar agricultural export trade.

“I’m pleased more of the private sector is joining us to help get practical tools into farmers’ hands.

“New Zealand farmers are highly efficient producers of milk and meat for the world, but global companies that pay a premium for these products – such as McDonald’s, Nestlé, Danone, Tesco and Sainsbury’s – are all pushing deep into their supply chain for emissions reduction, with ambitious scope 3 targets.

“These customers want to see more progress and we need to act now, or we risk losing these high-end customers and potentially breaching trade agreements. Further to this, competitor markets with more intensive farms are getting access to new tools to reduce emissions so they could take our place in supplying these customers.

“There is a very real and very disruptive risk to our agricultural sector from the need to reduce emissions but there is also an opportunity to stay among the most efficient producers in the world if we can get the right tools to our farmers.

“We’re confident that with our ambition, expertise, and increasing reach through the private sector, we’ll have 2-3 tools in widespread use by 2030.”

Sir Brian Roche KNZM, AgriZeroNZ Board Chair, says the JV Is confident it will have 2-3 tools in widespread use by 2030

BNZ CEO Dan Huggins says the bank is pleased to support AgriZeroNZ and partner with government and some of the country’s largest primary sector businesses to back its farming customers by investing in tools to help reduce emissions and maintain New Zealand’s competitive advantage in agriculture.

“BNZ has a long history of banking New Zealand farmers, and over that time we have worked alongside our farming customers as they have continually adapted and innovated to meet changing market dynamics.

“This public-private partnership approach to addressing on farm emissions continues that tradition, helping to ensure New Zealand maintains a resilient and productive agricultural sector into the future,” he says.

Dan Huggins, BNZ CEO, says it is investing in tools to help reduce emissions and maintain New Zealand’s competitive advantage in agriculture.

AgriZeroNZ is a world-first public-private partnership with an ambition to ensure all farmers in Aotearoa New Zealand have equitable access to affordable, effective solutions to reduce biogenic methane and nitrous oxide emissions, supporting a 30% reduction by 2030 and drive towards ‘near zero’ by 2040.

Since being established in February 2023, the JV has committed more than $29M across 10 high impact opportunities to bring emissions reduction solutions to market for Kiwi farmers. This includes a methane-inhibiting bolus, novel probiotics, methane vaccine development, and low emissions pasture.

It recently raised $18million from The a2 Milk Company, ANZ Bank New Zealand and ASB Bank becoming shareholders in April, with their funding also matched by government.

AgriZeroNZ has over 77 potential investment opportunities on its radar for review as it continues scanning the globe for solutions which could work on New Zealand farms, to invest and drive development towards a pasture-based solution. It is also working with officials to clarify the regulatory pathway in New Zealand for tools to be used on-farm.

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Wellington skyline gets a facelift as BNZ’s new building in the central city officially opens

Source: BNZ statements

Te Whanganui ā Tara (Wellington’s) skyline is evolving as Bank of New Zealand’s (BNZ) 15-storey new home in the central city – BNZ Place – today officially opened its doors to colleagues and customers.








Under construction since 2020, the architecturally designed building, occupies a full city block on the corner of Whitmore Street and Customhouse Quay, and was officially opened by Finance Minister Nicola Willis at a special event this morning.

CEO Dan Huggins says the striking new building reflects BNZ’s longstanding commitment to the capital city.

“BNZ has been proudly serving Wellington’s communities for 160 years, and BNZ Place not only reflects our commitment to the city but also our vision for the future. We’re thrilled that we are able to share this vibrant and innovative space with our customers, colleagues, and the people of Wellington.”

Designed to be modern and resilient, the building’s unique shape and structural design was informed by extensive research, including wind tunnel testing and seismic hazard assessments. The new headquarters represents a fresh start after the former BNZ building on Waterloo Quay was demolished in 2019, one of several buildings deemed irreparable after the Kaikōura earthquake in 2016.

BNZ Place offers a branch and customer service centre for retail and business banking and a public café on the ground floor. As New Zealand’s largest business bank, BNZ’s Partner Centre offers BNZ business customers state-of-the-art meeting rooms and office space with views of Wellington’s harbour which can be booked and utilised at no cost.

Newcrest Director Lincoln Fraser says, “We are proud to welcome BNZ’s customers and colleagues into their new Wellington home at the completion of what has been an exciting and highly collaborative project. The Newcrest and BNZ project teams have worked closely together to deliver a landmark building with market leading resilience and energy efficiency.”

BNZ Place at 1 Whitmore Street combines sustainability and innovation, aiming for a 5-star green rating with features like high-performance solar control glass and energy-efficient systems, supported by base isolation and a structural steel diagrid. Efficient floorplates, a double-height high entry lobby, inter-floor stairs, a rooftop courtyard, and panoramic views contribute to the state-of-the-art facility.

The design, development and internal fitout of the building also provided an opportunity for BNZ to support its business customers, with Studio Pacific Architecture, Vidak, Alaska Construction, Europlan, and Egmont Dixon all contributing to the build. In addition, the bank collaborated with another BNZ customer, Maxwell Rodgers, using their sustainably sourced wool fabrics to re-upholster and up-cycle furniture from the bank’s previous office, reducing waste to landfill.

“BNZ Place firmly cements our commitment to the capital, and we look forward to welcoming everyone to our new home,” Mr Huggins says.

Tracing BNZ’s roots in Wellington

BNZ’s history in Wellington began in 1862 with temporary offices on Willis Street. Over the years, BNZ has been a pioneer in architectural innovation, from the first drive-in bank in New Zealand to the construction of the Aon Centre in Wellington in the 1980s, the tallest building in New Zealand at the time of construction.

The bank’s architectural legacy includes the innovative use of reclaimed land for its early headquarters, the 1901 building designed by Thomas Turnbull, the purpose-built BNZ Centre in 1985, and the transition to a 5-star green building on the Wellington waterfront.

A brief history

In 1862, BNZ purchased a triangular section on reclaimed land with a frontage along Lambton and Customhouse Quay. The architect was William Mason of Dunedin. The location of the entrance door was later moved due to Wellington’s high winds.

Wellington 1863 building. Cnr Lambton and Customhouse Quay.
Wellington 1863 building. Cnr Lambton and Customhouse Quay. Photograph taken 1878 and shows the relocation of the main doorway.
Wellington premises built in 1901 (before removal of parapet) c.1920
Wellington Branch premises 1901 (after parapet removed) photo taken 1978.

 

In 1899, the earlier bank and adjoining Brandon Building were demolished to be replaced with a larger building following the subsequent purchasing of an additional 4 sections of land.

Since 1901, three other buildings on the block bounded by Lambton and Customhouse Quays and Hunter Street were purchased and occupied by various departments of BNZ’s Headquarters.

 

In 1985, the purpose built BNZ Centre was opened across the road. An underground tunnel linked the Old Bank and the New ‘Black Tower’. At the time of its construction, it was the tallest building in NZ (replaced by the BNZ Tower when that opened in Auckland in 1986). It remained the tallest building in Wellington until the opening of the Majestic Centre in 1991.

BNZ Centre, Wellington 1984

 
In 2009 BNZ moved out of the BNZ Centre and leased a purpose-built office building located on the Wellington waterfront, referred to as ‘Harbour Quays’. Owned by Centre Port, this building was a 5-star green building, later achieving 6 start for the interior fitout. Following the November 2016 earthquake, the building remained empty with BNZ staff re-located into temporary office sites around the Wellington CBD. The building has since been demolished.

 
 

 

 

 BNZ colleagues from The Terrace, Spark Central and Ricoh House are now reunited at BNZ Place, Wellington. A branch, community centre and collaborative workplace will co-exist in the same building in the heart of Wellington’s CBD. ​​​​​​​​​​​​​​​​​​​​​​

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BNZ brings back the branch experience

Source: BNZ statements

Bank of New Zealand (BNZ) today announced all of its branches across New Zealand will open at least five days a week by April 2025, in response to growing customer demand for more face-to-face interactions.

Anna Flower, BNZ Executive Personal and Business Banking, says BNZ’s focus is on being available for our customers when they need us.

“In recent years, we saw a massive shift in customer demand towards online and call centre services, which was accelerated hugely during the pandemic. We adapted quickly at that time by moving our bankers to where our customers needed us most, which saw us reduce the number of days many of our branches were open,” says Flower.

“Post-Covid, customer preferences have continued to evolve, and in those moments that matter, such as starting a business, dealing with a bereavement, or buying a home, we’ve heard from our communities and our personal and business customers that they want more opportunities to talk to us face-to-face.

“For those significant moments, we understand it’s the personal touch that counts. That’s why we’re bringing back 5 day a week opening to give customers access to our bankers’ expertise when and where they need us.

“This means where there’s a BNZ branch near you, the doors will be open 9.30am until 4.00pm, a minimum of 5 days a week,” says Flower.

The first BNZ branches to transition to opening five days a week are:

  • Feilding
  • Matamata
  • Oamaru
  • Te Awamutu
  • Thames
  • Te Puke
  • Wānaka

The remaining branches will move to full week-day operating hours by April 2025.

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BNZ’s new Māori Business Sentiment Survey reveals challenges and opportunities amid economic headwinds

Source: BNZ statements

Bank of New Zealand (BNZ) today released the findings of its inaugural Māori Business Sentiment Survey, aimed at providing insights into the current state and future prospects of Māori enterprises. The survey highlights the economic challenges being faced by Māori businesses, while also revealing their resilience and potential for growth.

Whetu Rangi, BNZ’s Head of Māori Business, says the survey aims to address the lack of comprehensive data on the experiences and perspectives of Māori businesses.

“The data gap around the sector has been a barrier to understanding and supporting the Māori economy. By launching this survey and committing to conducting it regularly, we are aiming to bridge this gap and foster ongoing collaboration and knowledge sharing. We believe that this survey will become a valuable tool to promote better understanding of the sector and help facilitate the flow of capital within the Māori economy.”

The survey, which received 125 responses from those involved with Māori businesses, revealed that economic conditions pose the most significant challenge for Māori enterprises, with 71% of respondents selecting it as their top concern. The findings also showed that nearly half (46%) of the respondents observed deteriorating business conditions over the past 12 months, while only a small fraction (15%) witnessed improvements.

Mike Jones, BNZ’s Chief Economist, says that the survey results broadly mirror weak business confidence across the economy.

“The sentiment expressed in these findings echoes what we’re witnessing in other parts of the economy as we navigate through the trough of the economic cycle. If anything, the confidence levels amongst survey respondents are on the weaker side of broader confidence indicators. This may reflect the Māori economy’s considerable investments in agriculture, forestry, and property – sectors that are currently under some strain,” he says.

Other findings include:

  • The majority (82%) of respondents expect costs to increase further over the coming 12 months.
  • Over the coming 12 months, more survey respondents expect profitability to deteriorate than to improve (27% increase vs. 33% decrease).
  • A similar proportion of respondents expect employment levels in their business to drop (29% increase vs. 34% decrease)

Opportunities amidst adversity

Despite the challenges, the survey also revealed signs of resilience and optimism among Māori businesses. While only 15% of respondents saw improvements in business conditions over the past year, a higher proportion (26%) anticipate better conditions in the coming 12 months.

Furthermore, more than 1 in 3 (37%) of those responding to the survey intend to boost investment in the coming year versus 24% that expect it to decrease. This may be signalling confidence in future growth potential.

“The investment plans reported in our survey are more robust compared to what we’ve seen in other business confidence surveys. As the economic cycle matures, we’ll be closely monitoring whether these intentions gain further momentum,” says Jones.

About the BNZ Māori Business Sentiment Survey

The launch of this survey is a continuation of BNZ’s commitment to Māori business and contributes to its wider strategy to facilitate financial solutions for Māori and enable whānau Māori and businesses to prosper.

More detailed findings and analysis are available here.

An infographic is available here.

The survey was in field May 2024 with base n = 125. Results are indicative, collected using a sample of convenience including BNZ Māori business customers. Results are intended only for discussion and should not be relied upon for decision-making or regarded as representative of the Māori business sector as a whole. For more information on how BNZ can support Māori businesses, visit Māori Business – BNZ.

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HY24 Results: Resilient result in subdued economic environment

Source: BNZ statements

Bank of New Zealand (BNZ) today announced a statutory net profit of $762 million for the six months to 31 March 2024, a decrease of $43 million or 5.3% on the prior year.

This reflects continued growth in BNZ’s lending and deposits, and an increase in operating expenses, up $64 million or 11.1%, as BNZ invested in its people and digital capability.

BNZ CEO Dan Huggins says this is a resilient result in a subdued economic environment and the bank is in a strong position to continue supporting its customers.

“High interest rates and cost of living pressures continue to impact business and household finances.

“While easing inflation is encouraging, it is expected to remain outside of the Reserve Bank’s target band until the end of year. Economic conditions are likely to remain challenging until there is a material reduction in interest rates.

“Supporting our customers through these challenging times remains our top priority.

“Our teams continue to proactively contact customers who we have identified as potentially needing additional support. For customers feeling under pressure, our message is get in touch.”

Revenue for the first six months was broadly flat at $1,770 million, while Net Interest Margin dropped by eight basis points on the prior year, reflecting strong competition across the banking sector and a change in deposit mix as customers shifted funds into term deposits to take advantage of higher interest rates.

Mr Huggins says despite the challenging operating conditions, the bank has maintained momentum across the business.

“Our team is focused on serving our customers brilliantly every day and supporting their ambitions, whether that’s investing in their business or buying their first, or next, home.”

“This focus is paying off with more New Zealanders choosing to bank with BNZ.”

BNZ’s total lending increased $2.4 billion or 2.4% in the first six months, with home lending up $1.1 billion or 1.9% and business lending up $1.3 billion or 3.0%. Total customer deposits increased by $1.5 billion or 1.9%.

Innovating to make banking simpler and easier

“We are always looking for new ways to integrate the latest technology into the way we work and how our customers’ bank to enhance their experience and make banking simpler and easier,” says Mr Huggins.

“We continue to invest heavily in protection measures to help keep our customers safer online, while also delivering digital solutions designed to free up time in their busy lives.

“Initiatives like our digital onboarding process which makes switching banks easier and faster for new customers by enabling them to open accounts digitally without having to go into a branch.

“Similarly, Open Banking, which will allow customers to share their data safely with third parties and enable more personalised products and innovative services for customers.”

BNZ has been leading the market in developing Open Banking APIs, with more than 250,000 BNZ customers already benefiting from secure budgeting and reconciliation tools and alternative payment options.

“We’re committed to continuing to drive innovation across our business to provide more value to our customers,” says Mr Huggins.

An unaudited summary of financial information for the six months ended 31 March 2024 follows:.
.

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BNZ launches Tech Business Hub to empower early-stage technology businesses

Source: BNZ statements

New Zealand’s tech sector is set to get a boost thanks to the launch of the country’s first dedicated banking hub for early-stage technology businesses.

The Waikato-based BNZ Tech Business Hub is designed to address the unique needs of early-stage tech companies.

It offers BNZ customers access to bankers with specific training and expertise who are equipped to offer financial services to address the unique challenges and opportunities faced in the technology industries.

Tim Wixon, Head of Technology Industries at BNZ, says, “BNZ’s Tech Business Hub is not just a new offering – it represents a philosophical shift in how we approach banking for this sector. Technology businesses have distinct needs which have not historically been met by traditional banking models. Our hub will help fill this gap by offering practical guidance, advice, and tailored services to help accelerate sector growth.”

According to the Technology Investment Network, the top 200 New Zealand tech companies generated the second largest source of offshore revenue after dairy. The industry is also growing faster than any other in New Zealand and offers salaries around 30% higher than the New Zealand average.

“Technology Industries continue to be an increasingly important part of the New Zealand economy. Every year, we see more of our country’s tech companies succeed on the world stage and BNZ remains committed to assist wherever possible”, says Mr Wixon.

BNZ is ambitious in its support for technology companies in New Zealand, launching a range of innovative solutions in recent years to assist the sector, including Contracted Receivables Financing, Revenue Based Financing for SaaS businesses, and Project Scale Up, which provide high-potential and high-growth technology businesses with access to non-dilutive capital.

The new Tech Business Hub complements these offerings, underscoring BNZ’s commitment to fostering a vibrant homegrown tech ecosystem.

Tech Business Hub Team Manager – Figo Liu – says, “Tech businesses require banking partners who speak their language and understand their journey. Our goal is to nurture the tech and startup ecosystem by making it easier to start a business and grow.”

With the Tech Business Hub now up and running, BNZ is turning its attention to further ways that it can support tech businesses at all stages of their lifecycle.

“We believe that New Zealand’s tech sector has enormous potential, and we want to do everything we can to help these businesses succeed,” says Mr Wixon. “The BNZ Tech Business Hub is the next step in our commitment to this important part of our economy, and we look forward to working closely with tech entrepreneurs and innovators to help them achieve their goals.”

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