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MEDIA BRIEFING

MEDIA BRIEFING . Financial Results – 6 months ended 31 December 2012. Topics Covered. Key Achievements Profit Performance Balance Sheet Growth Key Ratios Capital Adequacy Credit Quality Credit Rating Business Banking Kiwi Group Holdings Awards. Key achievements.

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MEDIA BRIEFING

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  1. MEDIA BRIEFING Financial Results – 6 months ended 31 December 2012

  2. Topics Covered • Key Achievements • Profit Performance • Balance Sheet Growth • Key Ratios • Capital Adequacy • Credit Quality • Credit Rating • Business Banking • Kiwi Group Holdings • Awards

  3. Key achievements • Profit after tax of $58m for the 6 months ended 31 December 2012, a 53% increase on profit for the 6 months to 31 December 2011 of $38m • Continued growth in balance sheet since December 2011: • Lending increased 6% from $12.1bn to $12.8bn • Customer deposits increased 5% from $11.7bn to $12.3bn • Continued customer growth • Kiwibank successfully issued a $150m subordinated bond into the domestic market. Despite being the first offer in New Zealand under the new Basel III capital rules, the bond was heavily over subscribed reflecting investor confidence in the Bank

  4. Financial Performance – Profit & Loss • Continued growth in profitability • Aided by favourable exit of impaired loans in the 6 months

  5. Financial Performance-Historical Summary

  6. Financial Performance-Balance sheet • Strong loan growth continues in competitive market • Matched by demand for Kiwibank’s retail deposit products

  7. Financial Performance (key ratios)

  8. Financial Performance-Capital Adequacy Total Capital ratio under Basel II is 13.5% compared to RBNZ’s minimum regulatory capital ratio of 8% Total capital increased by $156m to $980m, a 19% increase from 31 December 2011 $150m subordinated bond issue in December 2012, heavily oversubscribed

  9. Credit Quality (Impaired Assets) • The table shows total impaired assets as a % of gross loans and advances from Disclosure Statements dated 30 September 2012. Kiwibank remains favourably placed against other banks • Continued improvement in the quality of Kiwibank’s loan portfolio • Impaired assets of $56m at 31 December 2012 include all assets where interest charges have been suspended and a specific provision has been raised. Down from $100m at 31 December 2011. Source: 30 September 2012 Disclosure Statements. 31 December 2012 not yet available.

  10. Kiwibank credit rating In October 2012, Standard & Poor’s lowered Kiwibank’s credit rating one point to A+ (outlook stable). This mirrored the rating change to the Bank’s owner, New Zealand Post. The rating is among the highest of the trading banks operating throughout the world.

  11. Kiwibank business banking • Business Banking: A growth sector • We serve business and all their related personal needs • Target market is New Zealand SME’s. They represent over 90% of Kiwi business (Source: NZ Statistics, Feb 2013) and are core to our economy. • Today we have 33,000 businesses and have grown by 8% over the last year • There are 115 Kiwibank business specialists nationwide • We have a full suite of banking services including specialised business products • Our current and future focus is to enable our customers to spend more time on their business by making their banking easy.

  12. Kiwi Group Holdings Kiwibank is owned by Kiwi Group Holdings, which in turn is fully owned by New Zealand Post. Kiwibank’s sister companies in Kiwi Group Holdings are New Zealand Home Loans (NZHL), Kiwi Insurance, and Gareth Morgan Investments (GMI). As at 31 December 2012: NZHL had signed up $1 billion in home lending for the year Group KiwiSaver (GMI and Kiwibank) had circa $1 billion in investments and over 60,000 members GMI’s Funds Under Management grew to over $1.7 billion Kiwi Insurance posted a profit of $1.9 million in 2012

  13. Awards • 2012 Reader’s Digest New Zealand – New Zealand’s Most Trusted Bank Brand – 6 years in a row • Roy Morgan Research 2012 Customer Satisfaction Awards – Major Bank of the Year • 2012 CANSTAR Awards • First Home Buyer • Best Value New Zealand Term Deposits • 2012 Sunday-Star Times CanstarCannex Bank of the Year Awards • Most Price Competitive Bank • Sunday-Star Times Bank of the Year 2012 • 2012 NZ Innovators Award – Marketing and Communications • 2012 TVNZ NZ Marketing Industry Award

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