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Big bank profits signal need for inquiry
The country's four big Australian-owned banks have made handsome half-year profits, raking in a combined $2.5 billion, and an expert is raising questions.
Photo: RNZ
It's 11 percent more than the same period a year ago.
The country's largest bank ANZ, made $964 million for the six months to March, with BNZ on $490m.
ASB, whose reporting period is a December half year, posted a $593m dollar profit and, yesterday, Westpac reported a $482m dollar profit.
Massey Business School's director of Academic Programmes Claire Matthews said the high profits are down to a number of factors.
"New Zealand's economy continues to show a reasonable level of strength, we haven't had the downturn some were predicting," she said.
"The fact that the banks continue to grow means that in dollar terms their profits are likely to continue to grow.
"They continue to focus on reduced costs so they are likely to get a better return," she said.
Ms Matthews said that although high bank profits can benefit customers with, for instance, investment in better services, there needs to be clarity on whether customers are being disadvantaged.
"It's reaching a point where there has to be questions asked around the amount of money they are making," she said.
Ms Matthews said she doesn't believe the New Zealand banks have the same issues identified in their Australian counterparts, but banks here "aren't perfect".
"If we had an inquiry, we'd likely find something," she said.
Ms Matthews said an inquiry would help put the public's anxiety to rest.
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