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Bank of New Zealand fiscal H1 cash earnings drop 4.5% YOY

Bank of New Zealandposted a 4.5% year-over-year decline in cash earnings for the fiscal first halfended March 31, mainly due to an increase in collective provisions for the strugglingdairy industry.

The bank's cash earnings for the period dropped to NZ$461 millionfrom NZ$483 million in the prior-year period. Statutory net profit attributableto shareholders dropped 10.2% year over year to NZ$451 million from NZ$502 million.

Net interest income increased to NZ$882 million from NZ$850 million,while total operating income declined to NZ$1.13 billion from NZ$1.17 billion. Gainson financial instruments, less losses, fell to NZ$55 million from NZ$133 millionin the year-ago period.

Impairment losses on credit exposures increased to NZ$79 millionfrom NZ$47 million.

The bank's net interest margin for the period narrowed to 2.23%from 2.32% in the six months to September 2015 and 2.31% in the six months to March2015.

The common equity Tier 1 capital ratio dropped to 10.41% from10.70% at the end of September 2015 and from 10.79% at the end of March 2015. TheTier 1 capital ratio fell to 11.03% from 11.69% as of September 2015 and from 11.85%as of March 31, 2015. The total qualifying capital ratio declined to 12.58% from12.67% at the end of September 2015 and from 12.90% at the end of March 2015.

The company's New Zealand banking operations — which includeits insurance operations — reported a 3.3% decline in cash earnings to NZ$404 millionfor the fiscal first half from NZ$418 million in the year-ago period.

Bank of New Zealand parent National Australia Bank Ltd. reported a 6.5% year-over-yearincrease in cash earningsfor the fiscal half year.

As of May 4, US$1 was equivalentto NZ$1.45.