In recent years, New Zealand’s major banks have been raking in huge profits, often exceeding those of other industries. These profits come at the expense of their customers.

In 2021, the four largest banks in New Zealand – ANZ, ASB, BNZ, and Westpac – reported combined profits of over $4 billion. This is a staggering amount for a country with a population of just over 5 million people.

The 2022 year is shaping up to be even better with the ANZ recently reporting $1,107 Billion profit, BNZ $805m and the Westpac reporting $432 million profit, after they provisioned a massive $154 million extra for bad debts. This number may never have actually come to light, especially in the Agri sector subject to the recent weather events. Maybe it is a great way for Accountants to keep the profits low and the public quiet?

Banks make their money by charging fees and margins on the money they lend you and these are seemingly getting higher as their profits grow. Overseas it is still possible to get a mortgage rate of 3.94% fixed for 5 years. That may be why our NZ banks make more than their overseas counterparts.

New Zealand banks have invested heavily in the property market, contributing to the country’s housing affordability crisis, as they received cheap money and then encouraged us all to debt up and come along for the ride!

It is time for the New Zealand government and regulators to take action to rein in the power of the banks and ensure that they are held accountable for their actions. This could include introducing stronger regulations around interest rates and fees, greater transparency in their investments and business practices, but I am sure they will all have their own lobbyists to make sure this doesn’t happen.