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Management of Crown Lending and Crown Bank Accounts

Scope of Appropriation

This output expense is limited to the management of Crown lending and Crown and departmental bank accounts.

Significant Work Completed During 2010/11

  • Advanced $790.100 million distributed as follows: $394.200 million to DHBs; $185.100 million to Housing New Zealand; $110 million to the New Zealand Transport Agency (NZTA); $55 million to KiwiRail; $41.500 million to the Auckland Transition Agency; and $4.300 million to the Civil Aviation Authority.
  • Managed risk on $180 million of interest-rate swaps transacted for Housing New Zealand.
  • Established a short-term loan facility to provide the NZTA with flexibility to manage cash flow variations in the National Land Transport Fund. As at 30 June 2011, NZTA had borrowed a total of $110 million under this facility.
  • During August 2010, NZDMO facilitated a range of transactions to manage various Crown cash flows arising from the SCF receivership.
Statement of Service Performance for Output Class - Management of Crown Lending and Crown Bank Accounts
Performance Dimensions for 2010/11 Target Performance for 2010/11
All policy advice complies with the Treasury's Quality Standards for Policy.  Achieved. Achieved. 
Value-added for Crown lending meets target level.  $5 million.

Achieved. 

Value-added for Crown lending was $11.290 million.

Average value at risk (VaR) for Crown lending, at a 95% confidence level (see note on VaR below).  Average monthly VaR does not exceed $1.400 million.

Achieved. 

Average monthly VaR for Crown lending was $250,000. 

Compliance with risk management policies and parameters for management of Crown lending and Crown bank accounts.  No breaches.

Achieved.

There were no compliance breaches. 

Cost - Management of Crown Lending and Crown Bank Accounts
2010
Actual
$000
Management of Crown Lending and Crown Bank Accounts 2011
Actual
$000
2011
Main Estimates
$000
2011
Supp. Estimates
$000
205 Expenses 546 540 552
 

Funded by:

     
200 Revenue Crown 535 534 543
5 Other revenue 11 6 9

Notes:

Average VaR - performance measure

The Minister of Finance has agreed to a limit for average monthly VaR across the whole of NZDMO's operations of $14 million. NZDMO's performance target for the tactical portfolios is set at 10% of the total limit, or $1.400 million.

Value-added from Crown lending

NZDMO derives the value-added figure from its management reporting, which is calculated on a different basis from external Crown financial statement reporting. Historic performance helps guide the establishment of future targets, which are set annually taking into account changes in the external environment.

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