Financial Services New Zealand

Bank of New Zealand Whakatane Branch manager Sally Anderson.

Bank of New Zealand^# is facing increasingly tougher market conditions, characterised by a slow down in the New Zealand economy and a tightening of competition. Partly in response to these conditions, 2004 was characterised by major investment by Bank of New Zealand in products and services and in our retail network.

Financial Services New Zealand’s (FSNZ) net profit* was $328 million, an increase of 5.8% on the previous year.

In the highly competitive home loan market, we steadily increased our market share, reaching 15.6% of the market in September 2004 (source: Reserve Bank of New Zealand housing system data, September 2004).

Anna, Baby Jack and Dean Bailey with BNZ Agribusiness Manager Greg Blackwood on their Moutoa Farm.

While we have continued to perform strongly in most areas of the business market, our share of the small and medium-sized enterprise (SME) market has fallen steadily since 2001. Moreover, this fall in market share has occurred while the number of SMEs in New Zealand has been growing. In late 2004, we piloted a project in Auckland and the South Island to improve in-branch services provided to SMEs. In 2005, we plan to launch a credit card aimed specifically at SME customers, and improvements to accounts are under consideration.

We also launched our internet banking product for SMEs. The product has been designed to meet the specific needs of the SME market, including multiple levels of account access and authorisation, payroll facilities, electronic payments to Inland Revenue, and the ability to download transaction details to accounting packages.

Our automatic teller machine network was upgraded during the year to lower the average time for a transaction and to make them easier to use.

BNZ bloodstock manager Keith Lunn (right) with client Rick Williams on The Oaks Stud.

During the 1990s, New Zealand banks centralised responsibility for sales with technical specialists, like mobile mortgage managers, and at the same time introduced new channels, such as internet banking. Over this period the role of branch managers was phased out.

We have recognised the important role of branch managers in ensuring the quality of service delivered in branches and in acting as senior representatives of the bank in the communities we serve. More than 160 branch managers have been appointed to branches during the year, with a brief to continue the improvement in service performance and to lead staff in raising our local profile. Customer response to this initiative has been overwhelmingly positive.

During the year, the ACNielsen Consumer Finance Monitor found Bank of New Zealand to be the most improved bank when customers were asked about the quality of overall service from their main bank (source: ACNielsen Consumer Finance Monitor, September 2004).