Banking industry profits in the middle of the pack

Press Release – New Zealand Bankers’ Association

The New Zealand Bankers’ Association today released long run bank profitability data which compares returns on equity for New Zealand banks against NZX listed companies. Banking industry profits in the middle of the pack

The New Zealand Bankers’ Association today released long run bank profitability data which compares returns on equity for New Zealand banks against NZX listed companies.

Independent analysis undertaken by Massey University showed that retail banks’ average return on equity over the last five years fell in the middle of the range compared to NZX listed companies with a minimum market capitalisation of $100 million over the same period.

A comparison of return on equity over the last five years is set out in this table:


Click for big version.

Return on Equity: New Zealand banks compared to NZX companies
Five year (2008-2012) return on equity average for individual NZX companies (with a minimum market capitalisation of $100 million) and retail banks (shown in red) [The analysis does not include The Co-operative Bank as it became a registered bank in 2011. ] in descending order of performance.

“We wanted some analysis which put bank profitability in the context of other New Zealand businesses because there are a lot of views on bank profitability which we felt were overstated,” said New Zealand Bankers’ Association chief executive Kirk Hope.

Average bank returns on equity from 2008 to 2012 ranged from 7.5% to 16.3%, well below the top average return on equity of 31.7%.

“This analysis shows that banks fall in the middle of the range of profits compared to NZX listed businesses,” said Hope.

ENDS

Company Code 5 Year ROE %
RESTAURANT BRANDS NEW ZEALAND LTD RBD 31.7%
HALLENSTEIN GLASSON HOLDINGS LTD HLG 28.5%
TELECOM CORP OF NEW ZEALAND LTD TEL 26.8%
MICHAEL HILL INTERNATIONAL LTD MHI 25.8%
THE WAREHOUSE GROUP LTD WHS 25.6%
NEW ZEALAND EXCHANGE LTD NZX 24.4%
OPUS INTERNATIONAL CONSULTANTS LTD OIC 23.2%
FREIGHTWAYS LTD FRE 22.5%
AMP LIMITED AMP 22.2%
FISHER & PAYKEL HEALTHCARE CORPORATION FPH 21.6%
MAINFREIGHT LTD MFT 19.3%
RYMAN HEALTHCARE LTD RYM 17.8%
SKELLERUP HOLDINGS LTD SKL 16.8%
ASB BANK ASB 16.3%
SKY CITY ENTERTAINMENT GROUP LTD SKC 14.5%
TSB BANK TSB 14.5%
BNZ BANK BNZ 14.3%
DELEGAT’S GROUP LTD DGL 14.3%
CAVALIER CORPORATION LTD CAV 13.4%
EBOS GROUP LTD EBO 13.1%
STEEL & TUBE HOLDINGS LTD STU 11.4%
KIWI BANK Kiwi 11.3%
VECTOR LTD VCT 11.0%
TOWER LTD TWR 10.8%
NUPLEX INDUSTRIES LTD NPX 10.5%
WESTPAC BANK Westpac 10.5%
NEW ZEALAND REFINING COMPANY LTD (THE) NZR 10.3%
SKY NETWORK TELEVISION LTD SKT 8.6%
ANZ BANK ANZ 8.5% [Includes goodwill paid. ]
HELLABY HOLDINGS LTD HBY 8.1%
TRUSTPOWER LTD TPW 8.0%
PORT OF TAURANGA LTD POT 7.5%
FLETCHER BUILDING LTD FBU 7.5%
SBS BANK SBS 7.5%
AIR NEW ZEALAND LTD AIR 6.0%
SANFORD LTD SAN 6.0%
CONTACT ENERGY LTD CEN 5.6%
COLONIAL MOTOR COMPANY LTD CMO 5.0%
AUCKLAND INTERNATIONAL AIRPORT LTD AIA 3.9%
NEW ZEALAND OIL & GAS LTD NZO 3.2%
VITAL HEALTHCARE PROPERTY TRUST VHP 2.8%
METLIFECARE LTD MET 2.6%
GOODMAN PROPERTY TRUST GMT 1.7%
PROPERTY FOR INDUSTRY LTD PFI 0.1%
PGG WRIGHTSON LTD PGW 0.1%
GOODMAN FIELDER LTD GFF -0.3%
KIWI INCOME PROPERTY TRUST KIP -0.7%
GUINNESS PEAT GROUP PLC GPG -0.7%
ARGOSY PROPERTY LIMITED ARG -1.1%
INFRATIL LTD IFT -2.0%
FISHER & PAYKEL APPLIANCES HOLDINGS LTD FPA -2.8%
PRECINCT PROPERTIES NEW ZEALAND LTD PCT -4.3%
NATIONAL PROPERTY TRUST NPT -6.5%
PUMPKIN PATCH LTD PPL -13.8%
XERO LTD XRO -50.6%

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