1 July 2022

Banks post record profits

Gains grow as consumers worry about mortgage payments.

The banking sector posted a quarterly profit of $1.74 billion for March 2022, up 8.08% on the previous quarter, according to a KPMG survey.

Profits rose because of tightly managed expenses as well as increases to net interest income – the difference between what a bank earns from interest and the expense of its liabilities.

The major banks increased home loan interest rates in response to the increased cost of borrowing.

While some financial commentators argue that the impact of rising interest rates hasn’t been felt across the economy yet, our Consumer Sentiment Tracker data shows mortgage repayments rank the highest in financial concerns.

Our banking survey also showed that almost three quarters (73%) of New Zealanders think banks are charging too much and only half (52%) think they can be trusted.

The four big banks – ANZ, ASB, BNZ and Westpac – are responsible for 85% of lending in New Zealand, while the five NZ-owned banks account for 9% of lending.

Yet market share doesn’t reflect good customer service in our banking survey. Two Kiwi-owned banks came top for customer service (The Co-operative Bank at 86% and TSB at 78%), while the big banks scored between 54% and 64%.

While the banking sector doesn’t appear to be suffering from current economic pressures, those factors are likely to be reflected in future reports, said KPMG head of banking and finance, John Kensington.

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Tadeusz D.
12 Aug 2022
Banks ...

This is a result of Globalisation and obscene greed ... less than 10% of the world own 90% of its wealth ... how can anyone admire this ...? the fact that successive NZ govt's accept this banking situation is even worse ... only way it for NZ's to vote for change ...

Donna
02 Jul 2022
obscene

The obscene profits are only matched by the obscene arrogance of banks to be proud of that profit when so many Kiwi are struggling to feed their whanau/families. And again - why do governments still allow this disgraceful profiteering?? There is no excuse for the banks or any government.

Your Highness
02 Jul 2022
Australian-owned banks.

Everyone complains about their obscene profits, but they still manage 85% of the business. Support NZ banks instead.

Lynette N.
02 Jul 2022
Obscene banking profits

NZ sold these banks to Oz, now the profits -huge money- being sucked out of the economy. Come-on isn't it time this was seriously looked at, instead of getting a pass by politicians who were bankers or have banker-buddies.

Geoffrey S.
02 Jul 2022
The stupidity of NZ selling its banks

Lynette N is correct - but are NZ's interested enough to make a difference by not voting for the politicians who in the past enabled the sale of our banks?

Lionel H.
02 Jul 2022
Banking Survey

In the next survey I would hope Consumer would include New Zealand Home Loans.