New Zealand

New Zealand contributed profit after tax of $136 million for the March 2001 half year, compared to $100 million in the previous corresponding period, an increase of 36.0%. However profit after tax fell 9.7% from $151 million in the September 2000 half year, due largely to the impact of foreign exchange movements.

Bank of New Zealand

Profit & Loss Australian Dollars	Half Year to			Favourable / (Unfavourable) Change from
	Mar 01 $m	Sept 00 $m	Mar 00 $m	Sept 00 %	Mar 00 %
Net interest income	288	278	231	3.6	24.7
Other operating income	198	216	179	(8.3)	10.6
Total operating income	486	494	410	(1.6)	18.5
Other operating expenses	242	256	237	5.5	(2.1)
Underlying profit	244	238	173	2.5	41.0
Provision for doubtful debts	6	(3)	14	large	57.1
Profit before tax	238	241	159	(1.2)	49.7
Income tax expense	60	54	27	(11.1)	large
Profit after tax before goodwill and abnormals	178	187	132	(4.8)	34.8

The above table reflect the legal entity results of Bank of New Zealand. The table below shows the after tax contributions of the major geographic units.

New Zealand operations	172	183	128	(6.0)	34.4
Asian operations	6	4	4	50.0	50.0
Total Bank of New Zealand	178	187	132	(4.8)	34.8

Profit & Loss New Zealand Dollars	Half Year to			Favourable / (Unfavourable) Change from
	Mar 01 $m	Sept 00 $m	Mar 00 $m	Sept 00 %	Mar 00 %
Net interest income	364	351	293	3.7	24.2
Other operating income	250	272	227	(8.1)	10.1
Total operating income	614	623	520	(1.4)	18.1
Other operating expenses	309	345	292	10.4	(5.8)
Underlying profit	305	278	228	9.7	33.8
Provision for doubtful debts	8	(4)	18	large	55.6
Profit before tax	297	282	210	5.3	41.4
Income tax expense	75	66	37	(13.6)	large
Profit after tax before goodwill and abnormals	222	216	173	2.8	28.3

Key Performance Measures

Net interest margin	2.17%	2.34%	1.99%
Other operating income / total income	40.7%	43.7%	43.7%
Cost income ratio	50.3%	55.4%	56.2%
Gross non-accrual loans to gross loans and acceptances	0.27%	0.32%	0.40%

Highlights

Bank of New Zealand's (BNZ), New Zealand operations contributed profit of $172 million, an increase of 34.4% from the previous corresponding period and a fall of 6.0% from the prior period.

Net interest income grew strongly, increasing by 24.7% (24.2% in local currency terms) over the previous corresponding period to $288 million. This growth was attributable to higher lending volumes over the period, particularly in relation to housing following the successful launch of GlobalPlus Home Loans. Net interest margins have increased from the prior corresponding period from 1.99% to 2.17%, largely due to the stable interest rate environment that allowed for margins to be regained.

Other operating income rose by $19 million or 10.6%, (10.1% in local currency terms) over the previous corresponding period to $198 million. This was largely the result of increased corporate fee income and growth in treasury income for Wholesale Financial Services, as well as increased banking fee income as a result of higher volumes, partly offset by customers migrating to lower cost channels.

Other operating expenses increased 2.1% (5.8% in local currency terms) over the previous corresponding period and declined 5.5% (10.4% in local currency terms) from the prior period to $242 million, reflecting improved efficiencies and the rationalisation of key processes whilst successfully growing revenue streams. The cost to income ratio (in local currency terms) has fallen from 56.2% for the March 2000 half year to 50.3% in the current period.