Which are top 3 NZ banks to explore in 2022?

 Highlights

• NZ has a strong banking system.
• ANZ saw the strongest performance in NZ with strong revenue and profits in FY21.
• WBC reported a 105% increase in cash earnings to $5.4 billion in 2021 on prior year.

The banking sector of any country is responsible for holding people’s financial assets and leveraging the money to create more wealth.

New Zealand has a highly strong banking system. NZ has 27 registered banks with 4 large Australian-owned banks responsible for 85% of bank lending.

Let’s take a look at the top 3 banks that can be explored next year.

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Australia and New Zealand Banking Group Limited (NZX:ANZ,ASX:ANZ) 

ANZ delivered a good margin performance in FY21 and grew pre-provision and after-tax profit in its largest business, Australian Retail & Commercial. The bank’s home loan revenue rose over 10%, while the total number of home loans in ANZ’s books declined during H2.

The Group saw the strongest performance in NZ with strong revenue and profits. ANZ’s bank in NZ stayed a well-run business offering vital diversification.

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ANZ plans to launch ANZ Plus in 2022 and release a digital home loan proposition towards the 2021 end.

ANZ ended the day 1.35% in green to close at $29.29.

Westpac Banking Corporation Limited (NZX:WBC, ASX:WBC)

Westpac saw substantial growth on simplifying the company after it withdrew businesses, closed products and streamlined fees.

WBC more than doubled its earnings over the year with a 105% increase in cash earnings to $5.4 billion because of reversal in impairments and lower notable item charges. The bank restored growth in mortgage lending but its margins were down 7bps due to low interest rates, intense competition and a substantial move to fixed rate mortgages.

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WBC remains committed to restoring its long-term value and enhancing returns.

WBC ended the day 1.84% in green to close at $22.71. 

Heartland Group Holdings Limited (NZX:HGH; ASX:HGH)

Heartland earned $87 million in 2021, with growth bouncing back in H2 after a string of lockdowns in H1. HGH’s total asset flow growth rate stood at 8%, indicating ups and downs produced by lockdowns and supply interruptions.

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The Group remains on course to fulfil its revenue target within the range of $93-$96 million. The Group made substantial progress in meeting its sustainability objectives, passing costs to customers via the delivery of digital platforms.

HGH ended the day 0.86% in green to close at $2.34.

Bottom Line

New Zealand’s banks have majorly stayed resilient to the COVID-19 pandemic and remain in a strong position.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)