Impairment charges drops BNZ profit

Bank of New Zealand reports a 56% fall in first-quarter profit.

Net profit fell to $126 million in the three months ended Dec. 31 from $289 million yer-on-year. Net interest income rose 7.8% to $388 million with BNZ increasing net margins to 40.5% from 38.5% from a year earlier.

BNZ earlier said its cash earnings rose on volume growth and higher fee income but declined to give a cash earnings figure. It also reported an improvement in lending volumes, reflecting confidence in the economy.

BNZ said its bottom line took a $74 million loss on the fair value of its financial instruments, compared to a $139 million gain a year earlier. It was also hit by a $36 million impairment charge on its credit exposures, up from a $3 million charge in 2011.