1. 1 Media Briefing Financial Results – 30 June 2010

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

3. 3 Key achievements Profit after tax of $45.8m for the year ended 30 June 2010, a 13% decrease on previous year’s profit of $52.5m * Continued growth in balance sheet since June 2009: Lending increased 23% by $1.93bn to $10.42bn (52% 2008/9) 3% increase in retail deposits from $6.72bn to $6.91bn ( 39% 2008/9) wholesale deposits from $1.55bn to $3.38bn, (118%) Continued growth in market share – Main Bank from 6.9% to 7.8% (Roy Morgan) Capital strengthened by $150m perpetual preference shares in May 2010 A$250m five year fixed rate Kangaroo bonds issued in Oct 09 * (June 2009 excludes $11.1m one-off gain for sale of group subsidiaries to 100% NZ Post subsidiary, Kiwi Group Holdings Ltd)

4. 4  Launched Kiwibank Kiwisaver with more transparent pricing and opportunity to actively manage investment  Loaded for Travel card which is a pre-paid, 5 currency reloadable travel card launched in June 2010 – a world first  Prime sponsor of the New Zealander of the Year Awards  “Best Value Bank” four years in a row (Canstar and Sunday Star Times)  Coveted Bank of the Year award by London-based The Banker magazine  Awarded New Zealand’s most trusted bank brand by Reader’s Digest  Launched Heaps! personal financial management tool as part of internet banking Key achievements continued

5. 5  Launched 3 new Go Fly (Air New Zealand) credit cards with family bundling of airpoints and grabaseat Thursdays  Created Kiwi Connector, a youth website providing information, competitions and music  Payments introduced Passport renewal service for British High Commission  Relaunched Business Banking internet banking  Launched Kainga Whenua loan scheme with Housing New Zealand Corporation

6. 6 Financial Performance – Profit & Loss Financial performance impacted by very strong competition in the domestic retail deposit market reducing margins between borrowing and lending. * June 09 excludes $11m for sale of group subsidiaries to 100% NZ Post subsidiary, Kiwi Group Holdings Ltd Dollars in thousandsJun-10Jun-09% growth Net interest income 133,390 163,413 Other income * 168,052 138,328 Total operating revenue 301,442 301,741-0.1% Total expenses(236,762)(229,291)3.3% Profit before tax 64,680 72,450-10.7% Income tax expense(18,832)(19,975) Profit after tax 45,848 52,475-12.6%

7. 7 Financial Performance - historical summary Bank emerged from recession with good volume growth, strengthened capital base and is on track to increase profit over the coming year * June 09 excludes $11m for sale of group subsidiaries to 100% NZ Post subsidiary, Kiwi Group Holdings Ltd Dollars in thousandsJun-10Jun-09Jun-08Jun-07Jun-06Jun-05Jun-04 Interest income 563,886 648,891 559,105 318,963 188,157 119,337 65,197 Interest expense(430,496)(485,478)(444,004)(239,965)(136,222)(83,046)(42,791) Net interest income 133,390 163,413 115,101 78,998 51,935 36,291 22,406 Other income * 168,052 138,328 122,997 124,558 98,373 75,038 58,839 Total operating revenue 301,442 301,741 238,098 203,556 150,308 111,329 81,245 Operating expenses(218,902)(214,946)(179,432)(158,414)(125,155)(99,504)(79,929) Impairment allowances(17,860)(14,345)(4,097)(460)(1,892)(946)(1,887) Profit before tax 64,680 72,450 54,569 44,682 23,261 10,879(571) Income tax expense(18,832)(19,975)(17,748)(13,830)(7,490)(3,640) 81 Profit after tax 45,848 52,475 36,821 30,852 15,771 7,239(490)

8. 8 Financial Performance - Balance sheet Lending growth continues despite slowdown in the housing market Strong depositor support continues to maintain retail funding ratio Wholesale assets maintained at high levels to reflect liquidity requirements of uncertain environment throughout the year Dollars in thousandsJun-10Jun-09% growth Assets Loans and advances 10,418,502 8,492,01323% Wholesale & other assets 1,819,873 1,879,022 Total assets 12,238,375 10,371,03518% Financed by: Liabilities Retail deposits 6,911,909 6,717,0423% Wholesale deposits 3,383,416 1,548,534118% Securities issued & other liabilities 1,354,287 1,750,293 Total Liabilities 11,649,612 10,015,86916% Shareholder's equity * 588,763 355,16666% Total liabilities and shareholder's equity 12,238,375 10,371,035 Ratio retail deposits to retail lending66%79% * Includes $15m capital injection in Dec 2009 and $150m perpetual preference shares issued in May 2010

9. 9 Financial Performance (key ratios) * June 10 excludes $150m perpetual preference shares issued in May 2010 * *June 09 excludes $11m for sale of group subsidiaries to 100% NZ Post subsidiary, Kiwi Group Holdings Ltd Ratios in percentage terms Jun-10Jun-09 Profitability measures Net interest inc./avg.total assets1.2%1.9% Net profit after tax/avg shareholder's funds *11.5%15.4% Efficiency measures Operating expenses/total income **72.6%71.2% Operating expenses/avg total assets1.9%2.4% Average Balances ($000's) Lending - Fixed Mortgages 148 142 Deposits - Term Deposits 81 84

10. 10 Financial Performance – Capital Adequacy Total Capital ratio under Basel II is 12.0% compared to RBNZ’s minimum regulatory capital ratio of 8% Total capital increased by $203.1m to $722.1m, a 39% increase from June 09. $150m perpetual preference share issue in May 2010 $15m share capital injection by NZ Post to support business growth in December 09

11. 11 Credit Quality (Impaired Assets) The table shows our total impaired assets as a % of total assets from latest available Key Information Summaries. 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 $37.8m include all assets where interest charges have been suspended and a specific provision has been raised Source: June 10 GDS for Kiwibank and latest published GDS’s for other banks

12. 12 Credit Quality (Total Credit Provisions to Total Assets) A key focus from management and RBNZ is the total credit provisioning to total assets Each bank has a different product and risk portfolio to Kiwibank which has a high % secure mortgage book and LMI insurance for assets over 80%. Source: Most recently available GDS’s BankLatest GDS Previous Quarter GDS Kiwibank0.17%0.13% ASB0.49%0.48% BNZ0.76%0.66% Westpac1.26%1.02% ANZ/National1.28%1.08%

13. 13 The future Continue strong customer growth through being the banking leader in “value for money” Strong focus on helping customers switch to Kiwibank and driving change to make switching between banks easier Continued development and promotion of financial management tools (heaps!) and encouraging savings Consider any investment opportunities in the market as they arise Active “customer care” programme to help financially distressed customers. Growing insurance business – Bancassurance Not currently intending to renew Government Retail Guarantee (comes up for renewal in October)