Rates strategy delivers for Kiwibank

Kiwibank’s latest general disclosure statement shows net profit for the three months jumped 43.7% to $16.1 million, reversing a profit fall in the September quarter and taking net profit for the six months ended December to $25.8 million, up 13.9% on the previous first half.

Its mortgage book grew by $869 million to $6.39 billion in the latest three months. Using Reserve Bank figures as a proxy for total lending on residential housing by banks, Kiwibank accounted for 35.7% of the $2.43 billion of the increase in lending between September and December.

That takes its mortgage market share to 4.1% from 3.6% at the end of September. Kiwibank chief executive Sam Knowles says his bank took "a very aggressive position" by holding its interest rates below its major competitors and "front-footing" rate cuts late last year.

"We stuck to our plan of being slow to rise and fast to fall with home loan rates and it produced excellent results," Knowles says.