The six banks participating in the Regional Banking Hubs trial are renewing their commitment to not close regional branches until the end of the year, when the trial concludes.
The September 2019 announcement of the hubs pilot included a voluntary commitment to not close regional branches for the period of the trial. The full commitment was in place for 15 months but was suspended in January this year because of the significant impact of Covid-19 on customer behaviour and the hubs launch timeframe.
The renewed commitment is the same as before – it will not include branches within the city council boundaries of the six main urban centres of Auckland, Tauranga, Hamilton, Wellington, Christchurch and Dune din. It does not include already announced consultations and closures and only applies to the six banks (ANZ, ASB, BNZ, Kiwibank, TSB and Westpac). It does not include NZ Post/Kiwibank co-locations or earthquake strengthening, health and safety, or lease expiry.
Any commercial decisions about whether or not to close any branch that falls outside the commitment will be made solely by the relevant bank at its discretion.
The commitment comes into force today. It follows constructive discussions with the Minister of Finance’s office.
“The six banks are pleased with community interest in the trial, although it is too early to get a clear picture of the data,” says New Zealand Bankers’ Association chief executive Roger Beaumont.
“The banks are also listening to feedback and working on potential enhancements, such as cash floats for businesses.
“In the meantime, NZBA will explore the best framework for the hubs to be able to move ahead if the trial is successful.”
For more information about the Regional Banking Hubs trial please see: https://www.nzba.org.nz/consumer-information/regional-banking-hubs/regional-banking-hubs-pilot/
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ANZ, ASB, BNZ, Kiwibank, TSB and Westpac announced today they would honour an earlier commitment not to shut any regional offices until a pilot of four small-town banking hubs wraps up.
Reserve Bank of New Zealand
Ministry of Business, Innovation and Employment
The New Zealand Bankers’ Association says borrowers whose repayments were deferred due to the COVID-19 pandemic and are still struggling, may get an additional temporary payment deferral, have the term of the loan extended to reduce repayments, or be moved to interest-only repayments for a period.
New Zealand Bankers’ Association chief executive Roger Beaumont said: “Banks are working closely with the few affected customers who still need help to get back on track.”
The loan repayment deferral scheme introduced a year ago to help borrowers financially affected by the Covid-19 pandemic ends today.
The scheme allowed home and business loan repayments to be fully deferred temporarily. Deferrals were made possible by the Reserve Bank allowing these loans not to be viewed as in hardship. Credit reporting agencies also agreed that Covid-related deferred loans would not impact individual credit ratings.
The loan deferral scheme was introduced in March 2020 for six months and extended to 12 months in August 2020.
“We’re delighted with the scheme’s success. It made an important contribution to the wider story of how New Zealand as a whole managed the economic impact of the global pandemic in the last year,” says New Zealand Bankers’ Association chief executive Roger Beaumont.
In the last year over 66,000 household and business loans, with a total value of around $30 billion, were fully deferred. At the end of February there were around 3000 household and business loans still deferred, with a total value of around $1.1 billion. That represents a fraction of all household and business lending for banks, which totals around $480 billion. Those numbers have continued to decline through March.
“Banks are working closely with the few affected customers who still need help to get back on track. Assistance for these customers will be tailored to their individual circumstances.
“Options for customers in hardship may include a further temporary payments deferral, extending the term of the loan to reduce repayments, or moving to interest-only repayments for a while.”
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Commerce Commission
“Banks make their own individual risk-based assessments on all lending applications on a case-by-case basis. This will take into account the risk and security of the asset.”
Beaumont said the money provided by banks would provide support and skills to financial mentors working with families.