KPMG’s Financial Institutions Performance Survey (FIPS) reports have provided insights into New Zealand’s financial services sector for over 30 years. Each edition presents industry commentary and analysis on the performance of New Zealand registered banks, together with a range of topical articles from industry experts, regulators and our own business leaders.
Despite challenging economic circumstances, the non-bank sector has continued to grow in 2023. Participants of KPMG's Financial Institutions Performance Survey (FIPS) for the non-bank sector have reported a combined increase in loan books (gross loans and advances) of 9.59% ($1.62 billion), and a growth of total assets across the sector of 8.14% ($1.66 billion.
Margins however have come under pressure, with KPMG’s survey reporting a combined decrease in net profit after tax (NPAT) 27.10% ($10.84 million) over the year to a total of $ 298.16 million. This is due to a combination of reduced margins caused by the increased cost of funding seen across the non-bank sector, additional levels of both expenses and provisioning.
Despite the widely experienced decrease in profits, only 4 out of the 28 participants reported a loss for their financial reporting periods.
- Net interest income increased by $113.68 million to $1,355 million (reflective of the increased gross loan books and interest rates rising)
- Non-interest income decreased 9.88% ($51.29 million) to $570.47 million
- Operating expenses increased 15.37% ($168.61 million) to $1,266 million
- Impaired asset expense increased 129.30% ($157.64 million) to $279.56 million
- Tax expense decreased by 38.07% ($48.74 million) to $79.29 million.
A key challenge for the non-bank sector is the lack of recognition of the role they play in the wider financial services market. When speaking with the sector, KPMG heard the importance of addressing the misconceptions, particularly with the regulators and some prospective customers.
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