Banks: Summary income statement and related ratios - S20

Released
23 November 2018 03:00 p.m.
Next release
26 February 2019 03:00 p.m.
Source
Reserve Bank of New Zealand
Periodicity
Quarterly
Previous years: Quarterly:
Sep 2016 Sep 2017 Dec 2017 Mar 2018 Jun 2018 Sep 2018
Income statement ($m)
Interest income1 5,326 5,405 5,499 5,437 5,560 5,651
Interest expense1 2,920 2,869 2,902 2,828 2,904 2,974
Net interest income1 2,406 2,535 2,598 2,609 2,657 2,677
Other income1 669 811 896 766 852 877
Total operating income1 3,075 3,347 3,494 3,375 3,508 3,553
Operating expenses1 1,307 1,335 1,403 1,387 1,384 1,396
Impaired asset expenses1 155 22 67 168 66 -19
Profit before tax1 1,613 1,990 2,024 1,821 2,058 2,176
Profit after tax1 1,175 1,435 1,457 1,315 1,490 1,558
Balance sheet ($m)
Total assets1 505,778 512,185 525,954 527,367 543,344 537,766
Interest-earning assets1 457,769 481,243 495,325 496,955 505,813 506,202
Total liabilities1 469,896 475,272 485,453 486,772 501,514 496,335
Interest-bearing liabilities1 400,364 424,224 432,384 435,981 446,035 442,501
Equity1 35,881 36,914 40,501 40,595 41,830 41,432
Profit ratios (%)
Return on assets1 0.9 1.1 1.1 1.0 1.1 1.1
Return on equity1 11.9 14.0 13.9 12.8 13.6 14.3
Net interest margin (%)
Interest income to interest-earning assets1 4.64 4.48 4.47 4.44 4.45 4.43
Interest expense to interest-bearing liabilities1 2.91 2.71 2.69 2.64 2.64 2.66
Net interest margin1 2.09 2.10 2.11 2.13 2.13 2.10
Other ratios (%)
Other income to total operating income1 21.8 24.2 25.6 22.7 24.3 24.7
Other income to total assets1 0.5 0.6 0.7 0.6 0.6 0.6
Operating expenses to total operating income1 42.5 39.9 40.1 41.1 39.5 39.3
Operating expenses to total assets1 1.0 1.0 1.1 1.1 1.0 1.0
Impaired asset expenses to total operating income1 5.0 0.6 1.9 5.0 1.9 -0.5
Registered banks
Number of registered banks 24 24 25 26 26 26
  1. Data may not be comparable over time due to changes in accounting standards. See background notes for more detail.

The data: coverage, periodicity, and timeliness

Coverage characteristics

Since June 2013, the Reserve Bank has conducted a monthly survey of registered banks' financial performance.

Data from 1 July 2013 in this table is sourced from the Registered Bank Income Statement Survey (ISS).

The survey was updated in July 2018 to collect information that could be used to calculate selected monthly yields. This also enabled the provision of a more detailed breakdown of interest earned on loans and advances in these quarterly tables. Please note there are minor variances between the discontinued ‘Housing loans’ and ‘Other loans’ series and the ‘Total loans’ series, as a result of data quality improvements following the introduction of the updated survey.

Earlier data (to provide a historical context) has been sourced from registered banks' Disclosure Statements and the Net Interest Margin Survey.

The income data presented in the tables are calculated by aggregating the consolidated information for registered banks.

For a history of banks registered in New Zealand see the list of past and present banks.

Volatility

As the data are quarterly income and expense flows they will tend to be more volatile than balance sheet data. Movements in interest rates, exchange rates, and the number of days in a quarter will all have an influence on the flows along with one-off income or expense items that occur in a single quarter.

Periodicity

Quarterly

Timeliness

Data is released approximately two months after the reference quarter.

Access by the public

Statistics release calendar

The Statistics Release Calendar provides a long-term plan of scheduled releases. It is updated and released on the first working day of the month.

Integrity

Dissemination of terms and conditions under which official statistics are produced, including confidentiality of individual responses

The information is disseminated by the Reserve Bank as a service to the public in a format that preserves the confidentiality of transactions. The function and operations of the Reserve Bank are governed by the Reserve Bank Act 1989.

The Reserve Bank publishes aggregated data. Individual institutional data is confidential.

Find out more about the Reserve Bank Act 1989.

Provision of information about revisions and advance notice of major changes in methodology

Provisional data are italicised. Data are deemed provisional when a series is under review. New data, or revised data, are in bold font. This applies to the summary table only and not excel files. Revisions are generally published when a table is next due to be updated and released. Should revisions need to be made more promptly, a note is posted on the website.

Any major changes in methodology will be posted as a special note.

Quality

Dissemination of documentation on methodology and sources used in preparing statistics

A copy of the survey template and definitions is available from our Surveys page.

Go to the Surveys page.

Dissemination of statistics that support statistical cross-check and provide assurance of reasonableness

Disclosure statements published by registered banks offer checks for reasonableness.

Comparability over time

The most recent data is sourced from the ISS which was introduced in July 2013.Improvements to the ISS return where made in 2018 to enable the publishing of selected monthly yield data. These improvements have also resulted in improvements to the S21 table from September 2018.

To provide a historical context data from other sources has been used. This includes the Net Interest Margin Survey and publicly available Disclosure Statements. The information available from these other sources is not as detailed as that provided by the ISS.

While all the data is based on generally accepted accounting standards (GAAP) these have changed over time particularly over 2005 – 2007 when New Zealand moved to the international standards. A fuller explanation of that changeover is provided below. Consequently some of the data may not be fully comparable.

Changes to accounting standards

1. A new version of NZ IFRS 9 became effective for reporting periods beginning on or after the 1 January 2018. Banks have been adopting the standard during 2018 at the start of their new financial years.

2. Between 1 January 2005 and 1 July 2007, banks in New Zealand changed accounting standards from New Zealand accounting standards (NZ GAAP) to New Zealand International Financial Reporting Standards (NZ IFRS). The move to NZ IFRS affects both balance sheet and income data from banks’ disclosure statements.

Between 2005 and 2007 data is a combination of data reported under the two sets of accounting standards. For the 31 December 2005 quarter, 92 percent of the total assets of registered banks reported were held by banks using NZ IFRS.

Dates from which banks adopted NZ IFRS are:

Date:

Banks adopting NZ IFRS:

1 January 2005

The Hong Kong and Shanghai Banking Corporation Limited

1 July 2005

ASB Bank Limited

Commonwealth Bank of Australia

1 October 2005

ANZ National Bank Limited

Bank of New Zealand

Westpac Banking Corporation

1 January 2006

Rabobank Nederland

Rabobank New Zealand Limited

1 January 2007

ABN AMRO Bank NZ

Citibank NZ

Deutsche Bank AG

Kookmin Bank

1 April 2007

TSB Bank Limited

The Bank of Tokyo-Mitsubishi UFJ

1 July 2007

Kiwibank Limited

Income Statement

Total interest income

The value of interest earned on interest-earning assets.

Interest from cash and deposits

Interest earned from accounts with the Reserve Bank and from deposits (other than securities) with other banks.

Interest from debt securities

Interest earned from securities that can be bought or sold during the life of the security. Debt securities include government bonds, corporate bonds, CDs, local body bonds, preferred stock, collateralised securities (such as CDOs, CMOs, GNMAs) and zero-coupon securities.

Interest from mortgages

Interest on total loans fully secured by residential mortgage (fixed and floating).

Interest from floating mortgages

Interest on the total of all floating rate loans fully secured by residential mortgage.

Interest from fixed mortgages

Interest on the total of all fixed rate loans fully secured by residential mortgage.

Interest from loans to business

Interest earned on total business loan products includes loans cross collateralised between residential property and other assets (but not fully secured by residential mortgage) and all other non-financial business loans. It includes loans to both non-financial large (institutional) businesses and SME businesses. It excludes lending to households and, where counterparty information is available, excludes loans to customers in the finance, government (central and local) and NPISH sectors.

Interest from all other loans

Interest earned on all other loans, both secured and unsecured, includes interest earned on credit cards and personal loans, and interest income earned on securities with other banks purchased under agreement to resell (repos with banks). It also includes other net adjustments to items such as amortised fee expenses/income, early repayment penalty interest and discount unwind on individual provisions. The latter are adjustments made by banks to interest income for the non-interest component of the effective interest rate calculation.

Derivative interest income

Net interest flows for hedges associated with assets. The value can be positive or negative.

Other interest income

All other interest income not included elsewhere.

Total interest expense

The value of interest incurred on interest-bearing liabilities.

Interest incurred on deposits

Interest incurred on deposits that have been placed with the bank.

Interest incurred on debt securities

Interest incurred on securities issued by the bank that can be bought or sold during the life of the security.

Interest incurred on borrowing

Interest incurred on loans supplied to the bank.

Derivative interest expense

Net interest flows for hedges associated with liabilities. The value can be positive or negative.

Other interest expense

All other interest expense incurred not included elsewhere.

Net interest income

Interest income less interest expense.

Total other income

Total income earned by the bank other than that generated from interest.

Derivative income

Derivative income that was not reported as interest. The value can be positive or negative.

Trading income

Income, other than interest income, earned from financial assets classified as held for trading. The value can be positive or negative.

Other fair value adjustments

Includes all fair value adjustments through the income statement not included elsewhere. The value can be positive or negative.

Fees and commission income

Income from customers for the provision of services. Includes credit cards, transaction/ deposit account services and credit facility related fees.

Other income

All other income not included elsewhere.

Share of profit and loss of associates and joint ventures accounted for using the equity method

Income from associates and joint ventures accounted for using the equity method.

Total operating income

Net interest income plus total other income.

Total operating expenses

Expenses incurred other than interest or on the impairment of an asset.

Personnel expenses

Expenses related to the employment of the staff of the banks.

Fees and commission expenses

Fees and commission incurred for services provided to the banks.

Other operating expenses

All other expenses not included elsewhere.

Impaired asset expenses

Amounts charged against income to provide against potential or actual loan losses. Includes write backs when potential losses don't eventuate.

Other comprehensive income

Primarily fair value movements taken directly to equity and therefore not included in profit.

Profit before tax

Profit (or loss) before deducting tax expense.

Profit after tax

Profit (or loss) after income tax expense.

Profit attributable to non-controlling interest

The share of profit in partly owned subsidiary companies that belong to the other shareholders of those subsidiaries.

Profit attributable to equity holders of the parent

Profit available to the shareholders of the registered banks.

Balance sheet

Total assets

Total assets held by banks.

Interest-earning assets

Interest-earning assets held by banks.

Total liabilities

Total liabilities held by banks.

Interest-bearing liabilities

Interest-bearing liabilities held by banks.

Equity

Shareholders' capital including ordinary capital, retained earnings, perpetual preference shares, other reserves and head office accounts of overseas-incorporated banks.

Number of registered banks

All banks operating in New Zealand must be registered with the Reserve Bank of New Zealand. The number of registered banks has varied over time. For a history of banks registered in New Zealand see the list of past and present banks.

Ratios

Return on assets

Profit after tax as a percentage of average total assets. Data has been annualised by multiplying by the number of days in the year / number of days in the quarter.

Return on equity

Profit after tax of banks incorporated in New Zealand as a percentage of their average equity. Data has been annualised by multiplying by the number of days in the year / number of days in the quarter.

Interest income to interest-earning assets

Interest income as a percentage of average interest-earning assets. Data has been annualised by multiplying by the number of days in the year / number of days in the quarter.

Interest expense to interest-bearing liabilities

Interest expense as a percentage of average interest-bearing liabilities. Data has been annualised by multiplying by the number of days in the year / number of days in the quarter.

Net interest margin

Net interest income as a percentage of average interest-earning assets. Data has been annualised by multiplying by the number of days in the year / number of days in the quarter.

Other income to total operating income

Other income as a percentage of total operating income.

Other income to total assets

Other income as a percentage of average total assets. Data has been annualised by multiplying by the number of days in the year / number of days in the quarter.

Operating expenses to total operating income

Total operating expenses as a percentage of total operating income.

Operating expenses to total assets

Total operating expenses as a percentage of average total assets. Data has been annualised by multiplying by the number days in the year / number of days in the quarter.

Impaired asset expenses to total operating income

Total impaired assets expenses as a percentage of total operating income.

Interest from housing loans - discontinued

Interest earned from loans secured by residential property (excluding for business purposes). Residential property includes houses, apartments, flats, holiday homes etc. Discontinued in June 2018 when changes were made to the Income statement survey (see background notes for more details).

Interest from other loans - discontinued

Interest received from non-housing loans. Includes credit card loans, unsecured loans, and business loans. Discontinued in June 2018 when changes were made to the Income statement survey (see background notes for more details).

Updates to Income statement published series - S20

We recently completed an update to our Bank Income Statement Survey (ISS), in collaboration with banks. The revised survey captures improved interest income flows for loans fully secured by residential mortgage (both fixed and floating) products and the interest income flows for loans for business, as well as for consumer and other loan products. The survey also collects improved interest expense flows for deposit products. The update to the ISS brings this collection into line with the new Bank Balance Sheet collection and associated instrument definitions, introduced at the beginning of January 2017.

The new interest flow series have enabled the calculation of actual yields for mortgage and business loans, and these were published in a new web table (B6) earlier this month. Web tables S20 and S21 have been updated this month to reflect the improved series now available.

There are minor revisions back to December 2016 for a number of series including Interest Income, Interest expense, Other income, Operating expenses, Profit before tax and Profit after tax, as a result of data quality improvements.

In addition, three series for ‘Retail banks’ have been discontinued from the S20 table:

  • Interest income to interest-earning assets (ISSR.QRQG)
  • Interest expense to interest-bearing liabilities (ISSR.QRQA)
  • Net interest margin (ISSR.QRQC)

These series were originally published to remove the distortion of banks not operating within the domestic sector. This is no longer relevant for the ‘All banks’ ratios outlined above and as a result the series have been discontinued

If you have any questions please contact stats-info@rbnz.govt.nz.

Symbols and conventions for summary table

0 Zero or value rounded to zero
- Not applicable
.. Not available
bold Revised/new
italics Provisional
light red background Historical

General notes

  • Individual figures may not sum to the totals due to rounding
  • Percentage changes are calculated on unrounded numbers
  • You are free to copy, distribute and adapt these statistics subject to the conditions listed on our copyright page.