BNZ pays less tax after large software write-down leads to almost 40% profit drop
Monday, 4 May 2026
BNZ has reported a $301 million drop in profit as a result of writing down the value of its software assets.
It told shareholders on Australia’s ASX that BNZ had made an after-tax profit of $494m in the six months to the end of March, down from $795m in the six month period ending March 31 last year.
That was a drop of 37.9% in after-tax profit. However, excluding the IT write-down, the bank’s net profit was down $48m to $747m, a drop of just over 6%.
The bank’s revenue was up 0.7% at $1.76 billion.
The software write down reflected the reduced useful life of software assets, according to BNZ’s Australian parent bank National Australia Bank.
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Across the entire trans-Tasman National Australia Bank, including BNZ, the value of software was written down by A$1.347 billion (approximately NZ$1.65b).
The writedown, which was deductible as a business cost, meant the New Zealand tax authorities collected just $194m in tax from BNZ, down from $308m in the corresponding six-month period ending on March 31 last year.
National Australia Bank, which owns BNZ, told shareholders the New Zealand economy had entered 2026 in “a fragile position”, and that impacts from the Middle East conflict had damaged confidence, and high fuel prices were pushing up inflation.
BNZ chief executive Dan Huggins said: “The first half of the year saw many New Zealand businesses anticipating a steady return to economic growth. We saw both housing and business lending increase, as household and business confidence improved.”
However, he said: “The Middle East conflict has eroded that positive sentiment and our customers have once again had to adjust quickly.
“New Zealanders have shown resilience in recent years, but the impact of higher fuel prices on households and businesses has seen a change in sentiment from growing confidence to one of caution.”
“We continue to monitor the situation closely, but right now it is difficult to predict how the conflict in the Middle East and its impacts here will evolve, which means uncertainty is prevailing,” he said.
Like ANZ, which reported its half-year profit last week, BNZ was keen to assure its customers that it was well capitalised, and able to weather the economic slump US President Donald Trump’s unilaterally-declared war on Iran has created.
In its summary for shareholders covering the six month period, National Australia Bank said BNZ had posted higher earnings driven by lower credit impairment charges, and that revenue was stable.
However, it also noted that BNZ had faced “increased customer remediation charges”.
Remediation refers to fixing customer issues for which the bank is at fault.
In its New Zealand disclosure statement, BNZ said the banking group had received information requestions from regulators as part of both industry and bank-specific reviews, and it had also “initiated contact with regulators on compliance-related matters”, though it did not specify what they were.
But, it said: “The scope of review, inquiries and investigations can be wide-ranging and may relate to, or have related to in recent years to, a range of matters, including anti-money laundering and countering financing of terrorism compliance issues.”
It went on to say: “These matters can result in enforcement proceedings, fines and other financial penalties, as well as customer remediation programmes. There are contingent liabilities in respect of all such matters.”
However, it said such contingencies were often “highly complex and uncertain”.
Failures to meet legal obligations can be embarrassing and expensive.
ASB is currently awaiting a sentencing hearing after admitting anti-money laundering system failures.
Huggins said, however, that BNZ did not have any issues with its anti-money laundering compliances, but there were some small remediation programmes associated with some historic products.
BNZ remained the most popular of the big five consumer banks, according to net promoter score testing. A net promoter score is calculated by subtracting the proportion of a bank’s customers who would recommend their friends steer clear of it, from the proportion who would recommend their friends join it.
BNZ’s score was 38. That compared to scores for 29, 28, 19 and 18 for the other big banks, which were not named in National Australia Bank’s presentation to shareholders.