By Paul McBeth
Nov. 5 (BusinessDesk) - Westpac New Zealand chief executive Peter Clare is more upbeat about the local economic recovery, which is showing more positives than negatives as it gathers pace with the looming Canterbury rebuild.
The bank's economics team is predicting gross domestic product growth of 2.5 percent this year, accelerating to 3.2 percent in 2013, on the strength of the looming rebuild in Christchurch and tight housing supply in Auckland. Local boss Clare told BusinessDesk he expects confidence to return which will then flow into business activity, and Westpac is ready to support lending growth when it's needed.
"If I were to look back at economic indicators in the last six you'd get some green shoots, then someone would go around with a bit of Round-Up," Clare said. "It certainly looks patchy, but on balance there's more good news coming out than bad news."
Westpac's New Zealand unit boosted cash earnings 22 percent to $703 million in the 12 months ended Sept. 30, making it the fastest growing unit across the lender's Australasian business.
Clare said the past six months has been extremely competitive in the banking sector as lenders battle in a period of slow credit growth, and as ANZ prepares to ditch its National Bank of New Zealand brand.
Westpac has turned away "from some deals at the customer level right up to bigger deals" where prices or terms and conditions on banking covenants were too wide and outside the bank's risk profile, he said.
The lender expanded its share of agri-banking, which has been a focus for the lender in recent years as it looks to readjust its lending profile away from property, where it was been overrepresented.
Westpac grabbed nearly half a percentage point in market share as it looks to double the 12 percent share it had when Clare took over the reins of the local lender earlier this year. The bank wants to add 20 frontline agri-bankers over the coming year.
Westpac New Zealand increased term deposits 11 percent to $23.1 billion as at Sept. 30, and grew net loans 3 percent to $59.4 billion. Of that, mortgages grew 3 percent to $35.4 billion and business loans rose 4 percent to $21.8 billion.