Kirk Hope, CEO of bank lobby group the New Zealand Banker’s Association, said it was positive the timeframe for OBR’s implementation had been pushed back but it was still too tight.
New Zealand Bankers Association CEO Kirk Hope told interest.co.nz that there was a high level of competition between New Zealand banks. Banks in New Zealand also contributed around NZ$6 billion to the economy each year via their own operating expenses – mostly wages to over 25,000 employees – and taxes paid in New Zealand.
Commerce Committee
New Zealand financial institutions are fighting a United States tax that threatens to saddle them with millions of dollars in regulation costs and could end up costing Kiwi consumers. Outright opposition was not an option because non-compliant institutions would be slapped with hefty withholding penalties. It was “a very likely outcome” that those increased regulatory costs would then be passed on to ordinary consumers.
United States Internal Revenue Service and Treasury
“Banks are certainly standing behind their customers,” says Kirk Hope of the New Zealand Bankers Association. “No customers will be adversely affected as a result of this payments issue.”
The New Zealand Bankers’ Association today welcomed KPMG’s annual Financial Institutions Performance Survey (FIPS). In its 25th year, the 2011 survey shows New Zealand has a strong, stable and highly competitive banking sector that continues to serve New Zealand businesses and consumers very well in a globally uncertain environment.
“Our banks are well placed to face the coming challenges, which include higher cost of funds, increased regulatory costs, and continued low credit growth,” said New Zealand Bankers’ Association chief executive Kirk Hope.
Increases in bank profits for 2011 were largely driven by a reduction in bad and doubtful debts, a modest increase in margins for the full year, and a strong focus on cost management. While provisioning has reduced year on year from $812.7 million in 2010, to $548.5 million in 2011, business challenges, such as cost of funds, low credit growth and competition, may see pressure on margins in the coming year.
The regulatory burden is also increasing; for example, achieving compliance with the Reserve Bank’s prudential requirements including accelerated timeframes for new capital standards, Open Bank Resolution, and meeting new United States tax obligations. “Changes to the regulatory landscape have the potential to increase the costs for customers in 2012 and beyond. Any increased costs must be justified by the benefits of regulatory change,” said Hope.
“Let’s not forget the contribution banks make to our economy. The banking industry spent $4.46 billion in New Zealand in 2011. This includes payments to New Zealand businesses that provide goods and services to banks, contributions to community and voluntary programmes, and financial literacy initiatives. It also includes salaries paid to over 25,000 people who are employed by banks in New Zealand,” said Hope.
Loan shark regulators should open shops in at-risk areas to deter dodgy lending and give borrowers easier access to official help, says a banking leader. Bankers’ Association chief executive Kirk Hope said opening a shopfront would help regulators enforce the rules against predatory lenders in areas where they were concentrated.
Reserve Bank of New Zealand
The new chief executive of the New Zealand Bankers’ Association says banks need more policy detail and more justification from the Reserve Bank on its plans to implement new global capital adequacy requirements for local banks ahead of the timetable set by the international regulatory overseer.