Record profit
Our profit after tax increased by 12% from last year to $3,451 million. Cash earnings was up a strong 14% to $3,507 million. These are the real returns from a well managed business. Cash earnings per share was up 13% to $1.89 per share, an all-time record.
This strong result was built on good operational momentum across all our businesses resulting in revenue growth, on a cash basis, of a strong 11%. Despite a higher expense growth in the year of 6%, resulting largely from investments to drive revenue growth, we’ve further improved our efficiency, lowering our expense to income ratio to just 44.7%, down from 46.6% last year.
Returns also remained strong, with our cash return on equity coming in at 23.8%, up from 23.0% last year.
As an indicator of the strength and sustainability of the result, business unit performance was at or above expectations across the board.
Consumer Financial Services cash earnings were up 21%; Business Financial Services was up 11%; and BT was up 23%, with its earnings contribution to the Group increasing to 12%, up from 5% just five years ago. The Institutional Bank was up 16% on a reported basis, but up 18% excluding the largely discontinued structured finance business, and Pacific Banking was up 5%, notwithstanding an increase in provisioning during the year reflecting the economic and political instability in the region.
New Zealand Banking progressed well on its turnaround strategy under the leadership of Brad Cooper, who joined us in April 2007. While cash earnings was up only 2% in New Zealand dollars on the prior year, core earnings before tax and charges for credit risk increased a solid 9%.
Our profit after tax increased by 12% from last year to $3,451 million. Cash earnings was up a strong 14% to $3,507 million. These are the real returns from a well managed business. Cash earnings per share was up 13% to $1.89 per share, an all-time record.
This strong result was built on good operational momentum across all our businesses resulting in revenue growth, on a cash basis, of a strong 11%. Despite a higher expense growth in the year of 6%, resulting largely from investments to drive revenue growth, we’ve further improved our efficiency, lowering our expense to income ratio to just 44.7%, down from 46.6% last year.
Returns also remained strong, with our cash return on equity coming in at 23.8%, up from 23.0% last year.
As an indicator of the strength and sustainability of the result, business unit performance was at or above expectations across the board.
Consumer Financial Services cash earnings were up 21%; Business Financial Services was up 11%; and BT was up 23%, with its earnings contribution to the Group increasing to 12%, up from 5% just five years ago. The Institutional Bank was up 16% on a reported basis, but up 18% excluding the largely discontinued structured finance business, and Pacific Banking was up 5%, notwithstanding an increase in provisioning during the year reflecting the economic and political instability in the region.
New Zealand Banking progressed well on its turnaround strategy under the leadership of Brad Cooper, who joined us in April 2007. While cash earnings was up only 2% in New Zealand dollars on the prior year, core earnings before tax and charges for credit risk increased a solid 9%.