Financial Results – 30 June 2011
1

 Key Milestones
 Financial Performance
 Credit Quality
 The Future
2

 Profit after tax of $21.2m for the year ended 30 June 2011, a 54% decrease on previous year’s profit of $45.8m
 Net interest income has increased by 43% to $191.3m
 Strong focus maintained on customer funding with deposits now accounting for 80% of all bank funding.
 Improvement in cost income ratio from 73% to 68%
 Continued growth in balance sheet since prior year:



Lending increased 10% by $1.08bn to $11.5bn
14% increase in retail deposits from $6.9bn to $7.9bn
Net interest margin increased from 118bps to 147bps
3


Launched 32 and 90 day Notice Saver accounts which provided strong customer returns

Personal banking market continues to grow with customer numbers exceeding 750,000

Kiwibank became a Qualifying Financial Entity (QFE) during the year

“Best Value Bank” five years in a row (Canstar and Sunday Star
Times)

Coveted Bank of the Year award by London-based The Banker magazine

Awarded New Zealand’s most trusted bank brand, four years in a row, by Reader’s Digest
4


Appeals launched for both Christchurch earthquake and
Australian floods with $2m donated

Inaugural Kiwibank chairman (Rt Hon. Jim Bolger) replaced by Ian
Fitzgerald and subsequently Rob Morrison.
5

Net interest income increased due to customer preference for floating mortgages and raising of cheaper ECP funding
Dollars in thousands
Interest revenue
Interest expense
Net interest income
Other operating revenue
Total operating revenue
Operating expenses
Provisions expense
Net profit before tax
Taxation charge
Net profit after tax
Jun-11
720,372
(529,040)
191,332
161,668
353,000
(241,674)
(78,982)
32,344
(11,116)
21,228
Jun-10
563,886
(430,496)
133,390
168,052
301,442
(218,902)
(17,860)
64,680
(18,832)
45,848
Jun-09
648,891
(485,478)
163,413
138,328
301,741
(214,946)
(14,345)
72,450
(19,975)
52,475
Jun-08
559,105
(444,004)
115,101
122,997
238,098
(179,432)
(4,097)
54,569
(17,748)
36,821
* June 09 excludes $11m for sale of group subsidiaries to 100% NZ Post subsidiary, Kiwi Group Holdings Ltd
6

 Lending growth continues despite slowdown in the housing market
 Strong depositor support continues to maintain retail funding ratio
 Wholesale assets maintained at high levels to reflect liquidity requirements of uncertain environment throughout the year
Dollars in thousands
Assets
Loans and advances
Wholesale & other assets
Total assets
Jun-11
11,494,796
2,380,541
13,875,337
Jun-10
10,418,502
1,819,873
12,238,375
% growth
10%
13%
Financed by:
Liabilities
Retail deposits
Wholesale deposits
Securities issued & other liabilities
Total Liabilities
Shareholder's equity
Total liabilities and shareholder's equity
Ratio retail deposits to retail lending
7,902,445
2,683,825
2,681,218
13,267,488
6,911,909
3,383,416
1,354,287
11,649,612
607,849
13,875,337
588,763
12,238,375
69% 66%
14%
-21%
14%
7

Ratios in percentage terms
Profitability measures
Net interest inc./avg.total assets
Net profit after tax/avg shareholder's funds
Efficiency measures
Cost income ratio
Operating expenses/avg total assets
Capital ratios
Total Capital ratio (Pillar I )
Jun-11 Jun-10
1.47%
3.55%
1.18%
9.71%
68.5%
1.9%
72.6%
1.9%
11% 12%
8


Total Capital ratio under Basel II is 11.0% compared to
RBNZ’s minimum regulatory capital ratio of 8%

Total capital increased by $15m to $737m, a 2% increase from
June 10.
9


The table shows our total impaired assets as a % of total assets from latest available Key Information Summaries.
Kiwibank remains favourably placed against other banks

The ratio has increased slightly across strong balance sheet growth as a result of the Christchurch earthquake and the remaining effects of the global financial crisis (GFC)

Impaired Assets of $106m include all assets where interest charges have been suspended and a specific provision has been raised
Bank
Kiwibank
ASB
BNZ
Westpac
ANZ National
Latest DS
0.76%
0.55%
1.21%
1.55%
1.81%
Previous
Quarter
0.65%
0.79%
1.19%
1.22%
1.76%
Source: June 11 DS for Kiwibank and latest published
Disclosure Statements for other banks
10


Ratio has increased due to impact of
Christchurch earthquake and a more conservative approach to provisioning during the GFC

Each bank has a different product and risk portfolio to Kiwibank which has a high % secure mortgage book and LMI insurance for assets over 80%
Bank
Kiwibank
ASB
BNZ
ANZ/National
Westpac
Latest DS Previous Quarter
0.63%
0.46%
0.81%
1.11%
1.37%
0.49%
0.41%
0.77%
1.17%
1.38%
Source: Most recently published Disclosure
Statements
11


Consider any investment opportunities in the market as they arise
 Expand into new segments of business markets
 Retail transformation project aimed at improving customer experience

Growing insurance and wealth business
 Strong focus on helping customers switch to Kiwibank and driving change to make switching between banks easier

Growing asset finance business through Kiwi Asset Finance Limited
12