In response to the report, New Zealand Bankers’ Association chief executive Kirk Hope said that local banks are “among the best funded and regulated in the world, and fiercely competitive. That’s good for New Zealanders and our economy,” said Hope.
New Zealand banks had another solid and stable year according to according to KPMG’s Financial Institutions Performance Survey for the 2012 financial year.
“The survey shows our banks are among the best funded and regulated in the world, and fiercely competitive. That’s good for New Zealanders and our economy,” said New Zealand Bankers’ Association chief executive Kirk Hope.
The report found that net interest margins have not changed significantly over the last year.
“Margins have remained stable. There is less heat in the deposit market because banks have met their core funding ratio requirements. This is balanced by the effects of more borrowers moving to fix their loans, a low credit growth environment, and intense competition in the mortgage market,” said Hope.
Banks have continued to face increased compliance costs as New Zealand moves into line with the new international framework for financial regulation which aims to achieve and maintain financial stability, and includes the new Basel III capital rules.
Other compliance costs include banks preparing their systems for the enhanced anti-money laundering regime, which takes effect in June 2013 and aims to protect New Zealand from financial crime.
Banks are also working to implement the Foreign Account Tax Compliance Act, which has been imposed by the United States government on all foreign financial institutions in an effort to clamp down on tax avoidance by US citizens resident in other countries.
While managing these challenges banks continue to invest heavily in New Zealand.
In 2012 banks made a direct contribution to the New Zealand economy of $4.7 billion which includes employing around 26,000 people and payments to businesses that supply goods and services to the industry. Last year banks also paid $1.3 billion in tax, which represents 16 per cent of total corporate tax paid in New Zealand.
In addition to this direct investment, banks provide essential financial services to New Zealanders by lending to meet personal and business needs, providing a safe place to save and invest money, and maintaining a world-class payments system. Banks also contribute to their communities through a range of sponsorship and volunteer initiatives.
“Our strong and stable banking sector is supporting us through the economic recovery. The sector’s strength is reflected in the fact that several New Zealand banks appear in Global Finance Magazine’s World’s 50 Safest Banks list for 2012,” added Hope.
Law Commission
You’d expect the banks to be worried at the prospect of having their business impinged on in such dramatic fashion. But Kirk Hope, chief executive of industry lobby group the New Zealand Bankers Association, is remarkably calm.
Inland Revenue Department
The New Zealand Bankers’ Association is urging the public to be on guard against a telephone scam.
Scammers purporting to be from the New Zealand Bankers’ Association are phoning members of the public and saying they are investigating banks charging excessive fees and offering compensation to affected customers. They then ask people to provide their bank account details so they can “refund” fees.
“This is a scam. Anyone receiving such a call should not provide any personal information,” said New Zealand Bankers’ Association chief executive Kirk Hope.
“This provides a useful reminder to safeguard information relating to your bank accounts, and never to disclose your PIN numbers or account passwords to anyone, including people you trust.
“Never give out account details over the phone unless you made the call and you trust that the number you called is genuine. Ask for a name and number so you can call them back, and check that number against a number you know to be genuine.
“The New Zealand Bankers’ Association, and its member banks, will never ask a customer to disclose their PIN number or account password,” said Hope.
This kind of scam is known as “phishing”. Phishing attempts are usually made by email or phone. They can also be made by text message. Phishing scams try to get your bank account numbers, passwords and credit card numbers.
Commerce Committee
Analysis released today shows New Zealand’s major banks continue to perform well in the face of increased operating costs and greater regulatory pressures.
The findings were contained in PwC’s Banking Perspectives report of the five major banks’ banks’ results for the second half of their 2012 financial years.
“The report shows our banks are among the best funded and regulated in the world, and that’s good for New Zealanders and the economy,” said New Zealand Bankers’ Association chief executive Kirk Hope.
The report notes a number of New Zealand banks appear in Global Finance Magazine’s World’s 50 Safest Banks list for 2012.
A 12 per cent increase in profits in the 2012 year compared to 2011 was largely driven by a reduction in banks’ bad debt expenses.
The average return on equity has decreased from 16 per cent in 2007 to 14 per cent in 2012. “We have found these returns fall in the middle of the pack compared to major NZX listed companies,” Hope said.
Bank operating expenses are up 16 per cent since the first half of 2010. This is in part driven by a significant volume of new regulation. This ranges from the enhanced anti-money laundering regime to needing to maintain higher capital levels and increasing reliance on domestic and longer term overseas funding. Other current regulatory initiatives include consumer and securities law reform, responding to US tax avoidance law, and preparing systems to help recapitalise a bank in case of potential failure.
Within this context competition remains high among banks, as does customer satisfaction at 92 per cent according to a Consumer NZ survey. “Banks work hard to attract and keep their customers,” Hope added.
New Zealand’s long awaited anti-money laundering laws are now in place, almost four years after Parliament passed the Anti-Money Laundering and Countering Financing of Terrorism Act.
Kirk Hope says there are a range of questions that need to be addressed in considering tools that restrict amounts that can be borrowed to buy houses.