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The record growth in bank profits came to an end, under the pressure of bad debts and operating costs, and a compression of margins.
Credit card (file image).
Source: istock.com
KPMG survey shows net profit The chief of banking and financial services, John Kensington, said the decline was to be compared to the record level of profits attained in the course of the year. quarter of December.
He said that the way banks calculated bad debts had increased costs, while loan growth had slowed.
"We have experienced very low levels of disability [bad debts] for some time, this could be the beginning of a tick … I Depreciation costs more than doubled during the quarter, reflecting changes in accounting rules that require banks to account for expected losses rather than actual losses.
Mr. Kensington stated that the decline in profits and higher bad debts would be monitored, given the uncertainty and growing global volatility. "While it may be pivotal, the New Zealand banking sector is certainly not the time to panic.
The report shows that overall loan growth has slowed to just over 1%, with TSB Bank recording the strongest growth. Interest rate margins, a key measure of profit, were flat or weaker for the most part, while their business cost was higher.
million. Kensington said the banks would also feel their commercial behavior and practices stemming from the Royal Australian Commission. banking and financial services and inquiries from the New Zealand Financial Markets Authority and the Reserve Bank.
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