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Sound banks support economic growth

EMBARGOED UNTIL 6:00AM ON TUESDAY 4 MARCH 2014

Sound banks support economic growth

New Zealand banks continue to be strong and stable according to KPMG’s Financial Institutions Performance Survey for the 2013 financial year.

“Our banks are among the best funded and regulated in the world, and highly competitive. That’s good for New Zealand households, businesses and our economy,” said New Zealand Bankers’ Association chief executive Kirk Hope.

“The solid performance of our banks helped us get through the recession and is supporting our economy as we move into a period of growth.”

The KPMG report reflects the findings of the World Economic Forum’s Global Competitiveness Report 2013-2014 which rated New Zealand banks as the second most sound in the world after Canada.

“This is important because it helps our banks borrow money from overseas at good rates which can be passed on to New Zealanders,” said Hope.

The KPMG report found that despite lower funding costs, intense competition among banks has eroded the additional margin and effectively passed savings onto borrowers.

“Profitability is an important part of the banking sector’s strength. These returns allow banks to continue to invest heavily in New Zealand.

“In 2013 banks made a direct contribution to the New Zealand economy of $4.5 billion by running their businesses here and employing over 25,000 people. On top of this banks paid $1.5 billion in tax,” Hope said.

ENDS

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