Banks hit back at NZ regulator’s ‘simplistic’ profit analysis
Australia’s major banks – also the biggest in New Zealand – hit back at accusations from the NZ competition regulator that they are gouging Kiwi customers, defending their returns as being in line with other NZ companies and global lenders and reflective of the growth of the NZ economy that relies on their lending.
After the New Zealand Competition Commission last month fingered big bank profits as being “persistently high”, Australia’s majors have retorted that the analysis was simplistic and misleading, pushing back on the NZ government’s attempts to blame big lenders for the cost-of-living crisis.
In submissions published by the NZCC on Thursday, ANZ, the largest bank in NZ, described “strong competition” for personal banking services. BNZ (National Australia Bank’s NZ subsidiary) and Westpac described the market as “highly competitive”, and Commonwealth Bank’s ASB brand used the phrase “workably competitive”.
Each submission pointed to rising competition from Kiwibank – which is owned by the NZ government – along with smaller lenders such as TSB, Heartland, SBS, Cooperative and Rabobank. Kiwibank has 7.5 per cent of the home loan market and the move to full government ownership last year was expected to increase its access to capital, ASB noted. Competition is likely to increase from non-bank players, the banks added; Pepper Money earlier this month bought HSBC’s mortgage book in the country.
With an election due on October 14, many New Zealanders have struggled under high inflation, especially for food and energy, and higher interest rates, which the Reserve Bank of NZ lifted earlier than other central banks. This triggered the government’s creation of the inquiry.
Citing RBNZ data, the NZCC said in August the
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