The overall theme for the first half of 2011 is one of continued profitability, however, there is still uncertainty regarding the economic outlook with the sovereign debt crisis in Europe and ongoing issues in the US.
New Zealand’s banking sector continues to face challenging times, not only in dealing with the implications of the above, but also the levels of uncertainty regarding the country’s economy in general.
Overview of the quarter
Quarterly profits have returned to December 2010 levels following an increase in provisions resulting from the Canterbury earthquakes last quarter.
- The official cash rate has remained at 2.5.
- Whilst there are still uncertainties surrounding the timing and extent of the Christchurch rebuild, positive steps have been made with a number of planning consents being granted in recent months.
- Deleveraging continues, however, there continues to be increases in household lending.