“Our banks communicate very clearly on fees, which is a reflection of our very competitive banking sector. The fees being singled out are avoidable, and our industry has also made it easy for customers to switch banks if they feel the fees they’re paying are too high,” New Zealand Bankers’ Association chief executive Kirk Hope said. He is advising customers concerned about fees to talk to their bank rather than lawyers.
Responding to news of the launch of the “Fair Play on Fees” action, bank lobby group the New Zealand Bankers’ Association said talk of legal action failed to take into account differences between the New Zealand and Australian banking sectors.
Talk of legal action today relating to bank fees fails to take into account differences between the New Zealand and Australian banking sectors.
“Australian legislation around civil suits is very different from what we have in New Zealand. We are surprised the lawyers running this don’t appear to know about these differences. We also note that similar action in Australia remains unresolved,” said New Zealand Bankers’ Association chief executive Kirk Hope.
“The New Zealand banking sector also operates quite differently from Australia where this is being driven from.
“Three of the four main fees being targeted by this action have been overseen by the Commerce Commission for the last ten years. The Commission has released draft guidelines regarding these fees.
“Our banks communicate very clearly on fees, which is a reflection of our very competitive banking sector. The fees being singled out are avoidable, and our industry has also made it easy for customers to switch banks if they feel the fees they’re paying are too high.
“Banks work hard to attract and keep their customers, and will work with them to reduce their fees. This came through in a Consumer NZ survey last year which found bank customer satisfaction at 92 per cent, outshining other industries.
“We’re also not sure what’s motivating the action, how many Kiwis have signed up to this action, what their cut of any successful law suit would be, or how they’ve calculated the size of the proposed claim.
“We’d encourage customers concerned about fees to simply talk to their bank, rather than talk to lawyers,” added Hope.
Ministry of Business, Innovation and Employment
Ministry of Business, Innovation and Employment
Reading between the lines of what the Reserve Bank has said about the macroprudential tools it is working on, regulating loan-to-value ratios would not be its favoured option, believes the Bankers’ Association.
Is there a need for the Reserve Bank to even have the so-called macro-prudential tools it’s now publicly consulting on? This, says Kirk Hope, CEO of bank lobby group the New Zealand Bankers’ Association, is a good question.
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