New Zealand orders inquiry into banking sector amid competition concerns
June 12 (Reuters) -New Zealand will conduct an inquiry to assess competition in the country's banking sector, focusing on services in rural regions, Finance Minister Nicola Willis said on Wednesday.
The decision comes after a draft report in March by the country's competition watchdog said New Zealand's four major banks provided limited competition for personal banking, and that a focus on maintaining profit margins had resulted in under-investment in technology and low levels of innovation.
New Zealand's four largest banks - ANZ Bank New Zealand ANBHD.NZ, ASB Bank ABB030.NZ, Bank of New Zealand BNZHA.NZ and Westpac New Zealand WBCNZ.UL - are owned by Australia's "Big Four" banks. They make up around 85% of mortgage and other lending, and about 90% of deposits, official data showed.
"Promoting robust competition in the banking sector is vital to rebuilding the economy," Willis said in a statement.
Parliament's finance and expenditure committee will lead the inquiry and work with a committee that focuses on agriculture to determine the scope of the probe and prepare a report on rural banking.
"Growing the rural economy is critical to rebuilding New Zealand's economy and with farmers' satisfaction with banking services dropping in recent years, it's critical we better understand the role of bank competition," Willis said.
The finance committee will hear submissions from banks and may ask the chairpersons and chief executives to appear before the committee, she added.
New Zealand's agricultural sector accounts for 11% of the country's bank loans, according to a central bank report last year.
Reporting by Renju Jose in Sydney; Editing by Edwina Gibbs
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
