The banking system in New Zealand became a political issue
this week when the Green Party co-leader, Russel Norman,
accused the "big four" of strip mining the economy. Business
editor Dene Mackenzie investigates.
The ANZ result seemed to be the last straw for Green Party
co-leader Russel Norman, coming so soon after the results
from Westpac and BNZ which showed improved profits.
The record profits posted by ANZ bank highlighted the ongoing
weakness of having 95% of New Zealand's banking industry
owned by Australians, he said.
"Over the last five years, the big four Australian-owned
banks have sent $8.9 billion out of the country in the form
of dividend payments to their parent banks."
Only Kiwibank approached being anything like a suitable rival
to the big four, but it controlled just 2.5% of New Zealand's
total banking assets.
The Green Party would invest further in Kiwibank to bring it
up to the point where it could compete effectively with the
big four Australian-owned banks, Dr Norman said.
ANZ New Zealand announced on Thursday its statutory profit
was $1.1 billion for the year ended September, up 25% on the
Westpac announced on Wednesday it recorded a 41% rise in
profit to $454 million for the year.
BNZ reported a 16.8% lift in cash earnings to $612 million
for the year.
ANZ New Zealand chief executive David Hisco said the New
Zealand economy had continued to rebalance, with households
and businesses repaying debt and strengthening their
Strong financial discipline, including tight management of
costs and risk, had played an important part in ensuring the
bank's financial performance had held up well despite the
moderating effect of the deleveraging on revenue growth.
"Our performance is particularly pleasing given the difficult
trading environment and highly competitive nature of the New
Zealand banking market," he said.
Westpac New Zealand chief executive George Frazis said the
bank's customer-focused strategy, with local decision-making
and ongoing simplification of processes, was the foundation
of the bank's strong performance.
BNZ owner National Australia Bank (NAB) said BNZ's
performance reflected improved revenue through growth in
variable-rate housing products, re-pricing of the business
lending portfolio to reflect current market conditions and a
lower bad and doubtful debts charge.
Mortgage lending volumes increased with market share higher
at 16.2% NAB said.
The bank profits did not impress First Union secretary Robert
Reid who represents 28,000 people working in finance,
industrial, retail, stores and transport.
Westpac's strong cash earnings growth showed that the big
Australian banks had not only survived but thrived during a
global recession on the back of their own staff and
"Westpac is not alone. BNZ announced an 11.5% increase in
annual net profit after tax last week.
"All of the big banks' profits are well and truly back in the
cycle of making huge profit jumps each year while holding
down the wages of staff and keeping the pressure on customers
with high interest rates."
Westpac's profit announcement came on top of the revelation
earlier this year that Mr Frazis was earning $5.8 million a
year, Mr Reid said.
Westpac workers go into bargaining with the company next
"We want the bank to demonstrate that their own workers were
just as much a priority as paying out high dividends or $5.8
million CEO salaries."
The $1.1 billion profit of ANZ-National should cause the bank
to reconsider its plans to wind down the National Bank side
of the business, he said.
The bank had not only shared too little of its profits with
staff, whose 3% pay rise this year fell short of
cost-of-living increases, but also had plans to next year
phase out the National Bank brand.
With billion-dollar profits, the country's biggest bank
should be investing in its staff and in its retail network,
not trying to cut costs in a greedy grab for more, Mr Reid