MEDIA BRIEFING Financial Results – 6 months ended 31 December 2012

2

Topics Covered Key Achievements Profit Performance Balance Sheet Growth Key Ratios Capital Adequacy Credit Quality Credit Rating Business Banking Kiwi Group Holdings Awards

3

Key achievements Profit after tax of $58m for the 6 months ended 31 December

2012, a 53% increase on profit for the 6 months to 31 December 2011 of $38m

Continued growth in balance sheet since December 2011: Lending increased 6% from $12.1bn to $12.8bn Customer deposits increased 5% from $11.7bn to $12.3bn Continued customer growth

Kiwibank successfully issued a $150m subordinated bond into the domestic market. Despite being the first offer in New Zealand under the new Basel III capital rules, the bond was heavily over subscribed reflecting investor confidence in the Bank

4

Financial Performance – Profit & Loss Continued growth in profitability Aided by favourable exit of impaired loans in the 6 months

Dollars in millions31 Dec

201231 Dec

2011 % growth

Net interest income 140 123

Other income 87 81 Total operating revenue 227 204 11%

Total expenses (147) (151) (3%)

Profit before tax 80 53 51%

Income tax expense (22) (15)

Profit after tax 58 38 53%

5

Financial Performance-Historical SummaryDollars in millions 31 Dec 2012 31 Dec 2011 31 Dec 2010 31 Dec 2009 31 Dec 2008Financial performance

Interest income 400 381 348 268 362Interest expense (260) (258) (259) (202) (283)Net interest income 140 123 89 66 79

Other income 87 81 80 88 75Total operating revenue 227 204 169 154 154

Operating expenses (147) (133) (118) (111) (110)

Impairment allowances - (18) (31) (10) (6)

Net profit before taxation 80 53 20 33 38Income tax expense (22) (15) (6) (9) (12)

Net profit after taxation 58 38 14 24 26

6

Financial Performance-Balance sheet Strong loan growth continues in competitive market Matched by demand for Kiwibank’s retail deposit products

Dollars in millions31 Dec

201231 Dec

2011 % growthAssetsLoans and advances 12,842 12,068 6%Wholesale & other assets 2,390 2,318 Total assets 15,232 14,386 6%

Financed by:LiabilitiesCustomer deposits 12,286 11,716 5%Securities issued & other liabilities 2,137 1,971 Total Liabilities 14,423 13,687 5%

Shareholder's equity 809 699 16%Total liabilities and shareholder's equity 15,232 14,386

7

Financial Performance (key ratios)

Ratios in percentage terms  31 Dec

201231 Dec

2011

Profitability measures

Net interest inc./average interest bearing assets 1.91% 1.74%Net profit after tax/avg shareholder's funds 15.4% 11.6%

Efficiency measures

Operating expenses/total income 64.5% 65.1%Operating expenses/average total assets 2.0% 1.9%

Capital ratios

Total capital ratio (Pillar 1) 13.5% 12.0%

8

Financial Performance-Capital Adequacy Total Capital ratio under Basel II is 13.5% compared to RBNZ’s

minimum regulatory capital ratio of 8%

Total capital increased by $156m to $980m, a 19% increase from 31 December 2011

$150m subordinated bond issue in December 2012, heavily oversubscribed

9

Credit Quality (Impaired Assets) The table shows total impaired

assets as a % of gross loans and advances from Disclosure Statements dated 30 September 2012. Kiwibank remains favourably placed against other banks

Continued improvement in the quality of Kiwibank’s loan portfolio

Impaired assets of $56m at 31 December 2012 include all assets where interest charges have been suspended and a specific provision has been raised. Down from $100m at 31 December 2011.

Source: 30 September 2012 Disclosure Statements. 31 December 2012 not yet available.

Bank

31 December

2012

30 September

2012

Kiwibank 0.43% 0.55%ASB 0.71%BNZ 0.77%Westpac 1.43%ANZ 1.55%

10

Kiwibank credit ratingIn October 2012, Standard & Poor’s lowered Kiwibank’s credit rating one point to A+ (outlook stable). This mirrored the rating change to the Bank’s owner, New Zealand Post.The rating is among the highest of the trading banks operating throughout the world.

11

Kiwibank business banking Business Banking: A growth sector We serve business and all their related personal needs Target market is New Zealand SME’s. They represent over 90% of

Kiwi business (Source: NZ Statistics, Feb 2013) and are core to our economy.

Today we have 33,000 businesses and have grown by 8% over the last year

There are 115 Kiwibank business specialists nationwide We have a full suite of banking services including specialised

business products Our current and future focus is to enable our customers to spend

more time on their business by making their banking easy.

12

Kiwi Group HoldingsKiwibank is owned by Kiwi Group Holdings, which in turn is fully owned by New Zealand Post. Kiwibank’s sister companies in Kiwi Group Holdings are New Zealand Home Loans (NZHL), Kiwi Insurance, and Gareth Morgan Investments (GMI).As at 31 December 2012: NZHL had signed up $1 billion in home lending for the year Group KiwiSaver (GMI and Kiwibank) had circa $1 billion in

investments and over 60,000 members GMI’s Funds Under Management grew to over $1.7 billion Kiwi Insurance posted a profit of $1.9 million in 2012

13

Awards 2012 Reader’s Digest New Zealand – New Zealand’s Most Trusted

Bank Brand – 6 years in a row Roy Morgan Research 2012 Customer Satisfaction Awards – Major

Bank of the Year 2012 CANSTAR Awards

First Home Buyer Best Value New Zealand Term Deposits

2012 Sunday-Star Times Canstar Cannex Bank of the Year Awards Most Price Competitive Bank Sunday-Star Times Bank of the Year 2012

2012 NZ Innovators Award – Marketing and Communications 2012 TVNZ NZ Marketing Industry Award