Banks’ performance highly rated

5 June 2014

Banks’ performance highly rated

A public opinion survey has found a high level satisfaction among bank customers, the New Zealand Bankers’ Association said today. The survey also measured perceptions of the banking sector’s strength and acceptable profit levels.

Seventy-seven per cent of respondents were satisfied or very satisfied with their main bank, with only nine per cent dissatisfied or very dissatisfied.

“We’re pleased to see that more than three quarters of all bank customers are happy with their bank,” said New Zealand Bankers’ Association chief executive Kirk Hope.

“The results reflect how competitive our banks are. They work hard to attract and keep their customers by providing excellent service.”

The survey also found that 61 per cent of respondents agreed that the strength of New Zealand banks meant that New Zealand got through the global financial crisis with less damage than other countries.

The public perceptions line up with local and international analysis of our banks’ performance. The World Economic Forum’s Global Competitiveness Report 2013-2014 rated New Zealand banks the second most sound in the world after Canada. An International Monetary Fund report in March this year found New Zealand banks to be well capitalised, accessing more stable forms of funding, and experiencing low and declining bad loans. These findings were reflected in the Reserve Bank’s recent Financial Stability Report.

“We have a strong, stable and well-regulated banking sector which supports our economic growth,” Hope said.

The survey also posed a question about what level of bank profits was acceptable. Of those with an opinion, the median range cited as an acceptable return on equity was 15-19 per cent.

“That’s higher than our banks’ actual average return on equity, which was 14.21% in the 2013 financial year,” said Hope.

NZBA commissioned the survey.
The survey was undertaken by Curia Market Research in March and April 2014.
The sample size was 1014 respondents from a random selection of 15,000 people.
The maximum sampling error is +/- 3.1 per cent.

The survey included three questions which produced the following results:

Bank satisfaction

How satisfied are you with the bank you regard as your main bank? Would you say you are very dissatisfied, dissatisfied, satisfied or very satisfied?

Banks’ strength

Do you think the strength of the banks operating in New Zealand meant that New Zealand got through the Global Financial Crisis with less damage than other countries?

Bank profits

A return on equity is a company’s net profit as a percentage of the company’s overall equity or worth. What of the following ranges do you think is the maximum acceptable return on equity for a company such as a bank?
• Over 30%
• 25% to 30%
• 20% to 24%
• 15% to 19%
• 10% to 14%
• 5% to 9%
• 0% to 5%

ENDS

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