Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Aussie Bank Profit Clock’ launches


. MARCH 6TH, 2019

‘Aussie Bank Profit Clock’ launches in response to record ASB profits

Simplicity today launched an ‘Aussie Bank Profit Clock’, which gives a live estimate of the profits of Australian owned banks operating in New Zealand.

The site is at www.bankprofitclock.kiwi. The clock will be adjusted as the profits of Australian banks in NZ are announced.

The launch of the profit clock is in response to the record profits of Australian banks operating in New Zealand, which may still be increasing despite a slow down in the economy.

A particular concern is whether Australian banks will pay for their bad behaviours in Australia, recently exposed by a Royal Commission, via increased profits in New Zealand.

“We suspect they’re going to try and milk NZ customers to pay for their parent’s sins across the Tasman,” said Sam Stubbs, Managing Director of Simplicity.

“The recent six-monthly profit announcement by ASB is a big yellow warning sign,” he said. “ASB announced 6% higher profits in NZ, while profits were 6% lower for their parent company in Australia,” he said.

“And the ASB had the cheek to announce their profit on Waitangi Day. They claim to make their own decisions in NZ, with their own board. Announcing on Waitangi Day says to us they’re either a bank so embarrassed by their profits that they want to sweep them under the carpet, or a branch office taking orders from Australia,” he said.

“The words ‘record profits’ didn’t appear on their press release either. Are they proud, or ashamed, of the money they make from ordinary New Zealanders?” he said.

The ASB interim profit of $630m is 236% higher than its interim profit of $266m in 2008. This compares with a 54% increase in GDP from 2008-17 (source World Bank).

The Reserve Bank’s Financial Strength Dashboard shows ASB’s return on equity at 15.3%, almost double KiwiBank’s 8%.

The profit clock shows that Australian owned banks in New Zealand - ANZ, ASB, BNZ and Westpac, made a combined after-tax profit of over $5.1 billion in NZ in the last financial year, equating to over $590,000 an hour, 24/7, throughout 2018.

Profits of Australian banks operating in NZ are 2.5% of GDP vs their parent companies making 2.05% of GDP in Australia.

The $1.9 billion profit of ANZ was higher in FY18 than the profits of F&P Healthcare, Sky City, Air NZ, Auckland Airport, Ryman, Fonterra and Spark combined.

In describing the banking industry in New Zealand recently, ex ANZ Chief Economist Cameron Bagrie was quoted as saying it was “not just profitable, it is hellishly profitable.”

If 2018 profits are replicated in 2019, the profit clock shows that over $900m has already been made by the banks since Jan 1st. The ASB’s interim profit indicates that combined profits may actually be higher than those in 2018.

“The bank profit clock shines a light on the excessive profitability of the Aussie owned banks in NZ. Their relentless pursuit of ever-higher profits is bad for New Zealand customers,” said Mr Stubbs.

“We believe banks are entering their ‘Emperors New Clothes’ moment and being exposed for their excessive profitability. Squeezing the lemon this hard could ultimately lead to customers moving away, which will be bad for bank shareholders, including KiwiSaver funds like Simplicity,” said Mr Stubbs.

“Everyone wants strong, healthy profitable banks. But at their current level of profitability, Aussie owned banks over here are taking too much from ordinary New Zealanders and endangering their own sustainability,” he said.


Ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

NIWA: Scientists Say Methane Emitted By Humans ‘vastly Underestimated’

NIWA researchers have helped unlock information trapped in ancient air samples from Greenland and Antarctica that shows the amount of methane humans are emitting into the atmosphere from fossil fuels has been vastly underestimated... More>>

ALSO:

SMC Expert Reaction: Record Dry Spells And Effects On Forests

With no rain forecast before Sunday, Auckland is about to break a record for the city's longest dry spell. Niwa says Auckland is likely to hit 40 consecutive days without rain this weekend . The upper North Island is seeing severe meterological ... More>>

ALSO:

Reserve Bank: Official Cash Rate Remains At 1.0 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment is at or slightly above its maximum sustainable level while consumer price inflation is close to the 2 percent mid-point of our target range. ... More>>

ALSO:



Science Media Centre: Novel Coronavirus Detected In China – Expert Reaction

The virus was detected after more than 40 people were hospitalised with pneumonia in Wuhan City, China and the outbreak traced to a large animal and seafood market. The Centers for Disease Control and Prevention reports that person-to-person transmission ... More>>

ALSO:

Science Media Centre: Flooding could release toxic gas – Expert Reaction

A chemical substance known as ouvea premix stored at an old paper mill in Mataura could release toxic ammonia gas if it comes in contact with water.More>>

ALSO: