The state-backed lender saw half-year profits jump 48% over the period, compared to the final six months of 2017, when it made $42 million. The bank attributed the growth to the impairment of its CoreMod technology project, which adversely hit numbers in 2017.
In the six month period, Kiwibank saw a $1 billion increase in lending and deposits compared to the full year ending June 2017.
While the numbers look good for the bank, CEO Steve Jurkovich admits banks are feeling the heat, following the Royal Commission in Australia and subsequent investigations by the FMA and RBNZ in New Zealand. He said: "The current banking market is seeing unprecedented scrutiny around culture and conduct. We know that trust is central to customer relationships. We are crystal clear that conduct and compliance is not a project, a one-off initiative, or a static standard that is reached - it is about constant improvement and an unwavering attention to great customer outcomes over time."
Kiwibank's total loan book grew to $19.3 billion over the period, compared to $18 billion in the same period in 2017. Net loans and advances were up 7.2% over the period, and net interest income grew by 7.2%.
Jurkovich said Kiwibank would look to grow its SME business, and become "the SME bank for New Zealand". He added: "With increased investment in capability, we will deliver to the small and medium sized enterprises that make up the backbone of the New Zealand economy."
Jurkovich also commented on the Reserve Bank's proposed new capital adequacy rules, which will require major lenders to hold extra cash. Jurkovich says he supports the plans, which will create a more "even playing field" for smaller lenders. He added "We understand and support the Reserve Bank’s philosophy."
