The Commerce Commission released its final report on personal banking, stating that competition in the sector is lacking, with four Australia-owned banks dominating and generating high profits.
Antonia Watson, CEO of ANZ New Zealand, acknowledged that bank profits in New Zealand are higher than in many other countries. She explained that the major banks are unable to operate as New Zealand-owned entities, emphasizing the necessity to generate profits to satisfy international shareholders.
Watson noted that to continue investing in New Zealand, the banks must provide a reasonable return to their shareholders, highlighting the need to attract foreign capital. She mentioned that acquiring the major banks would require at least $50 billion, a sum that Kiwis cannot collectively provide.
While rejecting claims of minimal competition in the banking sector, Watson pointed to recent reductions in home loan interest rates as evidence of competitive pressures, although she conceded that there is potential for improvement.
Watson expressed support for the Commission’s recommendations, which she described as “solid,” but pointed out that banks have been slow to implement open banking practices. She attributed this delay to a lack of regulation, noting that countries like Australia, which have advanced consumer data rights and established regulatory frameworks, are further ahead in open banking.
She emphasized the importance of regulatory clarity regarding consumer data rights and the establishment of an accreditation agency to facilitate collaboration between banks and fintech firms.
Representatives from ASB, BNZ, and Westpac declined interview requests, while Kiwibank indicated it is prepared to compete with the larger banks.