PM signals market study into banking could be announced before election; Interest margins, RBNZ subsidies, bank fees, branch cuts and lack of inclusion should be in focus
You need to be careful implying banks are making most of their (super profits?) from the circa 150-200 basis point carry rate between wholesale and retail rates of residential mortgages - which seems to be tacitly implied, much of the (super profit?) will come from credit cards, over drafts, personal and corporate loans. P.s - don't get me wrong, as a resi landlord with I am all for rates going back down!
FYI - if banks are so profitable, why is their share price over the long run so very average? Owning banks (as an investor) is a dud bet. Implying they can't be that profitable if people don't invest in them.
This seems like a very important point. My impression was that an important factor has been the RBNZ wanting a higher level of retained surplus and the banks resisting.
Thanks Paul. You sure about that for the Australian banks once you include dividends and share price moves? Especially the Australian residents who can use the franking credits.?
I mean, the Reserve Bank chipping in on calls for a virtue-signally 'market study' of commercial banks on one hand, while trashing our economy to keep the financial sector profitable with the other, seems a bit rich... Fortunately, it finally seems questioning the neutrality of Reserve Banks is becoming a bit of a sport recently - https://www.youtube.com/watch?v=DNxXRigHri4&t=16shttps://www.youtube.com/watch?v=tU3rGFyN5uQ
I understand the costs to use pay wave in nz are more than oz. Another example of pushing costs onto customers. What a boon to small businesses it would be to lower these costs.
Merchant fees have been lowered (Thanks Labour!). I don't know about pay wave as we have stopped using it. These costs should not be put on the business but on the person using the card.
Actually it’s still cheaper for the banks to have businesses and customers using electronic vs cash. Pushing the cost to either business or customer is disingenuous at best. Reduction in physical cash is part of the justification for less branches/atms.
Hi Bernard. I can understand but not accept the closing of rural branches in view of their excessive profits. I am most concerned about the absence of change machines. Westpac has a great change machine available (3 in Hamilton that I know). Businesses need them to get change for their float but many people have to travel to get access. If banks are to close, how about requiring them to have change machines more readily available. (From Trudi)
The banks are particularly bad to women. I can recall a lot of appalling insults from the outset. First application in my late 20’s, which was two professional women, not partners, told “but either of you could get pregnant”. Apparently we would do that without partners and the support husbands/partners are obligated to provide legally. And they’ve been terribly sexist ever since. Westpac reporting record profits overseas so it will be diddly reporting presumably to suit there narrative. They obviously want to be more important than they really need to be and continue to consolidate their power in fewer and fewer hands for these mega profits created by Central banks for them. To no useful purpose to the country in fact to its citizens detriment. Windfall taxes on them and the others profiting from the crisis are needed and a good lever to help pay for said crisis really. It’s pretty direct which is good in terms of tax.
My blood pressure rises when I hear that a ‘market study or inquiry into ‘xyz’ could be announced etc etc’. In a time of national and global uncertainty on several fronts, such obvious delaying tactics is just not good enough. It is time for decisions to be made that actually address economic uncertainty, climate change, inequality and other social issues. Our futures depend on action, so if not this government, then who?
Oh Bernard, add air - you know like a sponge cake. Your job must be damnably spirit dampening, but I doubt that many of our ancestors got to this country by adding up certainties. Time to flap our wings and get a more accurate perception of our situation.
Appearance of action is often enough in a political sense, given our short little spans of attention amidst all the moving feasts of variables and events.
"Minister, two basic rules of government: Never look into anything you don't have to. And never set up an enquiry unless you know in advance what its findings will be."
"The job of a well conducted internal enquiry is to unearth a great mass of no evidence. If you say there was no intention, you can be proved wrong. But if you say the enquiry found no evidence of intention, you can't be proved wrong!"
Me too Alex, me too. How to not do something as a government, while pretending to do something, has become a well honed specialty of both major parties
Also, I note that many banks now offer $50 and $20 notes on machine withdrawals, not always offering $5 and $10 notes which creates difficulties for shopkeepers.
The banks are the licensed money printing arm of govt. The banks are licensed by the govt to create credit into the economy therefore ownership does not mean control as the govt us in control via licensing.
The banks were sold of or given away to the foxes to run and haven't they done well in creating huge debt and credit into the market causing huge inflation and debt burdens on the people.
The way the banking system work is to enslave everyone thru mortgages, debt and credit.
It is also designed to flow cash to from the middle bottom market to the rich shareholders of the banks to run their luxury lifestyle's.
Yes its a casino the house always wins the shareholder gets the money and everyone else gets the bag.
The answer is simple NATIONALIS THE BANKS AND BRING UNDER GOVT OWNER SHIP VIA THE RBNZ
Why do we need 20 banks when it can all be run through the RBNZ ONLINE.
Banks do no solely make their money via mortgages.
Most banks run a huge gambling operation on the top floor of their buildings gambling on the share market and currency trading.
The banks have made a killing on the share market up to 2022.
The banks make a daily killing on the currency markets.
If you go to the top floor of the BNZ in Queen St Auckland you will see a few hundred highly qualified university graduates who have varying finance degrees trading and making a killing for the bank.
Thanks Gerald. Having watched the banks closely for 20 years, I know that's not true. Lending into the housing market will always be more profitable for everyone except renters.
That’s the job of those Merav rightly called pathetic.
Open it up. :)
Will do. Many thanks.
You need to be careful implying banks are making most of their (super profits?) from the circa 150-200 basis point carry rate between wholesale and retail rates of residential mortgages - which seems to be tacitly implied, much of the (super profit?) will come from credit cards, over drafts, personal and corporate loans. P.s - don't get me wrong, as a resi landlord with I am all for rates going back down!
No need to imply. Click on through to the accounts to see it.
FYI - if banks are so profitable, why is their share price over the long run so very average? Owning banks (as an investor) is a dud bet. Implying they can't be that profitable if people don't invest in them.
This seems like a very important point. My impression was that an important factor has been the RBNZ wanting a higher level of retained surplus and the banks resisting.
That is true, which is why the Reserve Bank has been cautious, and why I think we saw the LVR loosening a couple of weeks ago.
Thanks Paul. You sure about that for the Australian banks once you include dividends and share price moves? Especially the Australian residents who can use the franking credits.?
thanks burnard great summary 👍
Happy to open it up.
Thanks. Will do.
No bank goes unmeasured... 🥹
I mean, the Reserve Bank chipping in on calls for a virtue-signally 'market study' of commercial banks on one hand, while trashing our economy to keep the financial sector profitable with the other, seems a bit rich... Fortunately, it finally seems questioning the neutrality of Reserve Banks is becoming a bit of a sport recently - https://www.youtube.com/watch?v=DNxXRigHri4&t=16s https://www.youtube.com/watch?v=tU3rGFyN5uQ
I understand the costs to use pay wave in nz are more than oz. Another example of pushing costs onto customers. What a boon to small businesses it would be to lower these costs.
Merchant fees have been lowered (Thanks Labour!). I don't know about pay wave as we have stopped using it. These costs should not be put on the business but on the person using the card.
Actually it’s still cheaper for the banks to have businesses and customers using electronic vs cash. Pushing the cost to either business or customer is disingenuous at best. Reduction in physical cash is part of the justification for less branches/atms.
Indeed. The Reserve Bank in Australia regulated them down.
And here we have the elephant in the room. The RBNZ. Forget the market study! The RBNZ just needs to do something about this.
Hi Bernard. I can understand but not accept the closing of rural branches in view of their excessive profits. I am most concerned about the absence of change machines. Westpac has a great change machine available (3 in Hamilton that I know). Businesses need them to get change for their float but many people have to travel to get access. If banks are to close, how about requiring them to have change machines more readily available. (From Trudi)
Interesting point. Thanks Trudi.
Happy to open this up for all.
The banks are particularly bad to women. I can recall a lot of appalling insults from the outset. First application in my late 20’s, which was two professional women, not partners, told “but either of you could get pregnant”. Apparently we would do that without partners and the support husbands/partners are obligated to provide legally. And they’ve been terribly sexist ever since. Westpac reporting record profits overseas so it will be diddly reporting presumably to suit there narrative. They obviously want to be more important than they really need to be and continue to consolidate their power in fewer and fewer hands for these mega profits created by Central banks for them. To no useful purpose to the country in fact to its citizens detriment. Windfall taxes on them and the others profiting from the crisis are needed and a good lever to help pay for said crisis really. It’s pretty direct which is good in terms of tax.
My blood pressure rises when I hear that a ‘market study or inquiry into ‘xyz’ could be announced etc etc’. In a time of national and global uncertainty on several fronts, such obvious delaying tactics is just not good enough. It is time for decisions to be made that actually address economic uncertainty, climate change, inequality and other social issues. Our futures depend on action, so if not this government, then who?
Yes Alex agreed. I feel like I'm in a night mare being chased by the wolf and my legs wont work.
What we need is a coalition of Greens, TOP, and Te Pati Maori - jump the fence into a totally different vision of where we are going
Exactly, a radical move to the left is what is needed.
That might give you 20% at best, up against at least another 60% who are wedded to the status quo. It's tough.
Oh Bernard, add air - you know like a sponge cake. Your job must be damnably spirit dampening, but I doubt that many of our ancestors got to this country by adding up certainties. Time to flap our wings and get a more accurate perception of our situation.
Appearance of action is often enough in a political sense, given our short little spans of attention amidst all the moving feasts of variables and events.
https://twitter.com/YesSirHumphrey/status/1652407732064927745
"Minister, two basic rules of government: Never look into anything you don't have to. And never set up an enquiry unless you know in advance what its findings will be."
At least it won't be an internal inquiry, with secret terms of reference ( Uffendell )
https://twitter.com/YesSirHumphrey/status/1643710434946498563
"The job of a well conducted internal enquiry is to unearth a great mass of no evidence. If you say there was no intention, you can be proved wrong. But if you say the enquiry found no evidence of intention, you can't be proved wrong!"
Haha, funny, sad, and so true, thanks for the humour, we need it.
Me too Alex, me too. How to not do something as a government, while pretending to do something, has become a well honed specialty of both major parties
Completely agree. The way I scoffed and shook with rage when the quote reached "if we [labour] are reelected".
While not really limited to NZ, we are being failed by the politicisation of clear-cut issues affecting the majority.
Who will show us real leadership? So far, Chris Hipkins has shown very little.
Also, I note that many banks now offer $50 and $20 notes on machine withdrawals, not always offering $5 and $10 notes which creates difficulties for shopkeepers.
The banks are the licensed money printing arm of govt. The banks are licensed by the govt to create credit into the economy therefore ownership does not mean control as the govt us in control via licensing.
The banks were sold of or given away to the foxes to run and haven't they done well in creating huge debt and credit into the market causing huge inflation and debt burdens on the people.
The way the banking system work is to enslave everyone thru mortgages, debt and credit.
It is also designed to flow cash to from the middle bottom market to the rich shareholders of the banks to run their luxury lifestyle's.
Yes its a casino the house always wins the shareholder gets the money and everyone else gets the bag.
The answer is simple NATIONALIS THE BANKS AND BRING UNDER GOVT OWNER SHIP VIA THE RBNZ
Why do we need 20 banks when it can all be run through the RBNZ ONLINE.
Banks do no solely make their money via mortgages.
Most banks run a huge gambling operation on the top floor of their buildings gambling on the share market and currency trading.
The banks have made a killing on the share market up to 2022.
The banks make a daily killing on the currency markets.
If you go to the top floor of the BNZ in Queen St Auckland you will see a few hundred highly qualified university graduates who have varying finance degrees trading and making a killing for the bank.
Go have a look for yourself.
Thanks Gerald. Having watched the banks closely for 20 years, I know that's not true. Lending into the housing market will always be more profitable for everyone except renters.