The Commerce Commission published its final report on personal banking, revealing a lack of competition in a market primarily controlled by four Australian-owned banks, which are generating significant profits.
Antonia Watson, the chief executive of ANZ New Zealand, acknowledged on Morning Report that the bank profits in New Zealand are indeed higher than those in many international markets.
Watson remarked that the larger banks cannot operate as New Zealand-owned institutions because they need to ensure profits to satisfy their overseas shareholders. To sustain investment in New Zealand, these banks must provide a reasonable return to their shareholders.
“We need to attract foreign capital. Unfortunately, we cannot afford to be Kiwi-owned, despite my preference for that. We simply lack the necessary $50 billion to enable Kiwi ownership of the major banks,” Watson stated.
She challenged the notion of limited competition among banks, pointing to recent reductions in home loan interest rates as evidence. “There is certainly competition present, but is there potential for improvement? Absolutely,” she added.
Watson expressed her support for the Commission’s recommendations, describing them as “solid,” while also noting that banks have been slow to adopt open banking practices. She attributed this delay to insufficient regulations in New Zealand, which contrasts with countries like Australia that have established consumer data rights and regulatory frameworks years earlier.
“We are actively working on open banking. One of our primary requests is for regulatory guidance. We need a clear consumer data right that delineates the liability when sharing customer data, along with an accreditation agency to simplify interactions with fintech companies,” Watson explained.
Other major banks, including ASB, BNZ, and Westpac, declined to participate in interviews, while Kiwibank, although also refusing an interview, stated its intention to compete with the larger banks.