For over 30 years, 乐鱼（Leyu）体育官网鈥檚 Financial Institutions Performance Survey (FIPS) reports have provided insights into New Zealand鈥檚 financial services sector. Each edition presents industry commentary and analysis on the performance of the sector, together with a range of topical articles from industry experts, regulators and our own business leaders.
Note: This year we have undertaken a rebranding of the survey from Non-Bank review to Specialist Lenders review, based on insights from our conversations with sector leaders.
Specialist Lender sector growth in 2024:
New Zealand鈥檚 specialist lending (previously referred to as non-bank) sector has experienced another year of growth, with participants of 乐鱼（Leyu）体育官网's 2024 Financial Institutions Performance Survey (FIPS) for the sector experiencing a growth in total assets of 6.98% ($1.26b) to $19.35b.
FIPS: Financial Institutions Performance Survey
Specialist Lenders Review of 2024.
Profitability challenges:
While overall the sentiment from the sector has been positive, profitability has again come under pressure, with 乐鱼（Leyu）体育官网鈥檚 survey reporting a combined 24.82% decrease in net profit after tax (NPAT) during 2024, decreasing NPAT to $243.02m. The observable decrease is largely attributable to the triple impact of increased cost of funding, increased opex and additional doubtful debt provision. Despite the widely experienced decrease, only 6 out of the 28 participants reported a loss for their financial reporting periods.
It will be interesting to see where profitability trends during the following financial year, and whether the specialist lenders sector can bounce back and restore profitability going forward. The answer to that question might well depend on two factors.
1) How they manage the falling interest rate cycle we now appear to be in; and
2) Where the New Zealand economy heads and when, if, and how quickly and how strongly it recovers . Will the much hoped for growth occur in HY2025 or will it be 2026?
Contributing factors to this year鈥檚 mixed results include:
- Net interest income increased by 4.33% ($46.95m) to $1,132.29m (reflective of the increase in gross loan and funding books and elevated interest rates)gross loan books and interest rates rising)
- Non-interest income increased 6.41% ($33.59m) to $557.23m
- Net interest margin dopped by 24bps from 6.57% to 6.33%
- Operating expenses increased 14.69% ($154.48m) to $1,206.21m
- Impaired asset expense increased 12.41% ($17.27m) to $156.35m
- Provisioning levels increased 6.26% ($16.91m) to $286.83m
- Tax expense decreased by 15.54% ($14.31m) to $77.78m.
Get in touch
John Kensington
Partner - Audit
乐鱼（Leyu）体育官网 in New Zealand
Ceri Horwill
Partner - Risk Consulting, Head of Banking & Finance
乐鱼（Leyu）体育官网 in New Zealand
Nicola Raynes-Pene
National Industry Leader - Financial Services
乐鱼（Leyu）体育官网 in New Zealand
We hope you enjoyed this report and would be delighted to discuss its content and insights in further detail.
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