MEDIA BRIEFING Financial Results – 30 June 2012

Topics Covered  Key Achievements  Profit Performance  Balance Sheet Growth  Key Ratios  Capital Adequacy  Credit Quality  The Future 2

Key achievements  Profit after tax of $79.1m for the year ended 30 June 2012, a 276% increase on previous year’s profit of $21.2m  Continued growth in balance sheet since June 2011:  Lending increased 8% from $11.5bn to $12.4bn  Customer deposits increased 9% from $10.6bn to $11.6bn  Customer growth continued and now exceeds 800,000  Celebrated 10 years since launch in Albany, North Shore, March

Key achievements continued Purchase of Gareth Morgan Investments (by Kiwi Group Holdings Ltd).  GMI manages more than $1.5 billion of funds  Adds $650 million to Kiwisaver funds  Looking to consolidate the two Kiwisaver funds later this year 4

Key achievements continued  Kiwibank’s credit rating confirmed as AA- by Standard and Poor’s  Rating amended from stable to negative following re-rating of New Zealand Post  ‘AA’ Fitch rating granted in June 2012; outlook stable  Aggressive promotions in a static home loan market  Great success with one-year fixed rate of 4.99% (required more staff on the phones)!  Continued support of the Kiwibank New Zealander of the Year and local heroes 5

Awards and achievements  Bank of the Year (Canstar and SST)  Best Value Bank (Canstar and SST)  First-Home Buyer Award (Canstar)  Highest level of customer satisfaction (Roy Morgan)  Most trusted bank brand (Reader’s Digest) 6

Financial Performance – Profit & Loss  Kiwibank substantially increased net interest income and reduced expenses resulting in profit after tax rising 276% Dollars in millions30 June June 2011% growth Net interest income Other income 162 Total operating revenue % Total expenses(308)(321)(4%) Profit before tax % Income tax expense(32)(11) Profit after tax % 7

Financial Performance-Historical Summary 8 Dollars in millions30 June June June June June 2008 Financial performance Interest income Interest expense (516)(529)(430)(485)(444) Net interest income Other income Total operating revenue Operating expenses (273)(242)(219)(215)(179) Impairment allowances (35)(79)(18)(14)(4) Net profit before taxation Income tax expense(32)(11)(19)(20)(18) Net profit after taxation

Financial Performance-Balance sheet Lending growth continues despite slowdown in the housing market Strong depositor support continues to maintain retail funding ratio 9 Dollars in millions 30 June June 2011% growth Assets Loans and advances12,44511,4958% Wholesale & other assets2,3002,380 Total assets14,745 13,8756% Financed by: Liabilities Customer deposits11,56510,5869% Securities issued & other liabilities2,433 2,681 Total Liabilities 13,998 13,2676% Shareholder's equity % Total liabilities and shareholder's equity 14,745 13,875

Financial Performance (key ratios) Ratios in percentage terms 30 June June 2011 Profitability measures Net interest inc./average total assets1.8%1.5% Net profit after tax/avg shareholder's funds11.7%3.5% Efficiency measures Operating expenses/total income65.1%68.5% Operating expenses/average total assets1.9% Capital ratios Total capital ratio (Pillar 1) 11.3% 11.0% 10

Financial Performance-Capital Adequacy  Total Capital ratio under Basel II is 11.3% compared to RBNZ’s minimum regulatory capital ratio of 8%  Total capital increased by $48m to $785m, a 7% increase from 30 June  $50m share capital injection by NZ Post to support business growth in December

Credit Quality (Impaired Assets)  The table shows total impaired assets as a % of gross loans and advances from Disclosure Statements dated 30 June Kiwibank remains favourably placed against other banks  The ratio has remained consistent across strong balance sheet growth as a result of targeting low LVR, seasoned (i.e. existing, switching) customers to maintain the quality of our lending book.  Impaired Assets of $84m include all assets where interest charges have been suspended and a specific provision has been raised. Down from $106m in Source: 30 June 2011 Disclosure Statements. 30 June 2012 not yet available. 12 Bank 30 June June 2011 Kiwibank0.67%0.92% ASB0.65% BNZ1.29% Westpac1.59% ANZ/National2.13%

Credit Quality  A key focus from management and RBNZ is the total credit provisioning to gross loans and advances  Each bank has a different product and risk portfolio to Kiwibank which has a high % secured mortgage book and LMI insurance for assets over 80%. Credit Provisions as a % of Gross Loans and Advances 13 Bank 30 June June 2011 Kiwibank0.73%0.76% ASB0.46% BNZ0.94% Westpac1.25% ANZ/National1.39% Source: 30 June 2011 Disclosure Statements. 30 June 2012 not yet available.

The future  Roll out of new shops layouts for Post and Kiwibank following pilot in Kapiti  Continued focus on helping customers switch to Kiwibank  Push harder to increase market share in small and medium enterprise market  Growth opportunities in the insurance business – Bancassurance  Consolidate market position as a bank of national and strategic importance  Continued growth of Kiwisaver 14