The Reserve Bank’s use of so-called macro-prudential tools to dampen a credit boom or bubble would ultimately see borrowers paying their banks higher loan rates, analysis commissioned by the New Zealand Bankers’ Association says.
Bankers’ association chief executive Kirk Hope said banks were never the target of the measures contained in the bill, which was aimed at reining in abusive loan sharks and dodgy debt collectors. “The most vulnerable consumers could be protected by enforcing the existing laws,” he said.
“Banks have worked really hard and have involved people like Writemark in the development of their product material,” Hope said. They also all have programmes to lift financial literacy among customers, and people in the community.
Kirk Hope talks to Rachel Smalley about bank profits.
Reserve Bank of New Zealand
A public opinion survey has found a high level satisfaction among bank customers, the New Zealand Bankers’ Association revealed today.
Eighty-two per cent of respondents were satisfied or very satisfied with their main bank, with only seven per cent dissatisfied or very dissatisfied.
“This is a pleasing result which shows that banks are continuing to put a big effort into customer service,” said New Zealand Bankers’ Association chief executive Kirk Hope.
“It also shows how competitive our banking sector is. By providing excellent service, banks work hard to attract and keep their customers.”
The survey also found that 63 per cent of respondents agreed that the strength of New Zealand banks meant that New Zealand got through the global financial crisis with less damage than other countries.
“Ongoing uncertainty in other countries, most recently in Cyprus, shows our banks in a good light. We have a strong, stable and well-regulated banking sector which supports our economic growth.”
The survey also posed a question about what level of bank profits was acceptable. Of those with an opinion, the median range cited as an acceptable return on equity was 15-19 per cent.
“This is higher than actual bank returns on equity since 2008, which averaged from 7.5 per cent to 16.3 per cent according to some analysis we had done last year. We found that banks fell in the middle of the pack compared to large NZX listed companies,” said Hope
Westpac New Zealand chief executive Peter Clare has been elected chair of the New Zealand Bankers’ Association for 2013/14.
ASB Bank chief executive Barbara Chapman was elected deputy chair.
“I look forward to working with colleagues from across the industry,” said Peter Clare.
“We have a strong and stable banking sector which invests in New Zealand and supports the needs of households and businesses. That’s particularly apparent when we look at the experience of other countries at the moment.”
Westpac takes over the chair bank role from ANZ.
New Zealand Bankers’ Association chief executive Kirk Hope said, “I would like to acknowledge David Hisco’s contribution as chair over the last year, and welcome Peter Clare to the role.”
The New Zealand Bankers’ Association is the industry’s voice and promotes policy outcomes which contribute to a successful banking system that benefits New Zealanders and the New Zealand economy.
Association membership is open to any bank registered under the Reserve Bank of New Zealand Act 1989. Currently the association has 14 members. The association’s governing body is its council, comprising the chief executive of each member bank.
Hope said that it was wrong to assume all high LVR borrowers were on comparatively low incomes; it might reflect a relatively high income and capacity to service the loan.
Heartland Bank today joined the New Zealand Bankers’ Association, bringing the total number of the association’s member banks to 14.
New Zealand Bankers’ Association chief executive Kirk Hope welcomed Heartland Bank. “We are pleased to have New Zealand’s newest bank join us. Having Heartland on board further demonstrates the diversity of our banking sector,” said Hope.
“Heartland is delighted to become a member of the association that has such an important role to play in the New Zealand banking industry,” said Heartland Bank chief executive Jeff Greenslade.
With roots stretching back to 1875, Heartland Bank provides services to small and medium-sized businesses, farms, and households in regional New Zealand. Heartland Bank became a registered bank in December 2012.
As the industry’s voice, the New Zealand Bankers’ Association supports a strong and stable banking system that benefits New Zealand. Member banks work together on non-competitive industry issues.
Other New Zealand Bankers’ Association members are ANZ Bank New Zealand, ASB Bank, Bank of New Zealand, Bank of Tokyo-Mitsubishi UFJ, Citibank, The Co-operative Bank, Hong Kong and Shanghai Banking Corporation, JPMorgan Chase Bank, Kiwibank, Rabobank New Zealand, SBS Bank, TSB Bank, and Westpac New Zealand.
Bankers Association chief executive Kirk Hope said the latest International Monetary Fund report on New Zealand pointed out the strength and stability of our banking system, and it was not helpful to compare it with Cyprus.