Banks not passing on rate cuts
Claims banks are not passing on lower interest rates to businesses and other customers are backed up by figures released this morning by Statistics New Zealand.
The figures show that, as a group, financial intermediary margins (which are dominated by banks) are at record highs.
The quarterly producer prices index, which calculates input and output prices for industries, includes a calculation of output prices for the financial services industry.
The last quarter showed an increase in output prices of 14.6% - and this follows increases of 10% in the December quarter and 6.1% in the September quarter.
The figure is calculated by a measure of the margins between the cost of borrowing by the banks and what is then charged to lend.
“In the latest quarter, this margin increased due to the rates for borrowing (by the banks) falling more than the rates for lending,” says the Statistics New Zealand release.
On an annual basis, the index rose a whopping 32.1% for the year to March.
Both the quarterly and the annual increase are the largest recorded since Statistics New Zealand began the series in 1994.
The previous two years saw falls of 2% and 4.9% respectively.
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Comments and questions10
Leaky homes
Grocery store duopoly
Telecon & Vodafone
GST on rates
Milk & Cheese
Power companies
Failed financial companies (read: pyramid schemes)
And now Banks can be added to the list.
What's interesting about it all, is NZ is so small. The "2 degrees" thing.
So in essence, we're all gouging or being gouged by people we are friends with or at least know.
The government finance guarantee scheme should be linked to these margins being in line with those in Australia. We cover them for risks in borrowing so they can rip us off in their lending, great scheme..
And this is allowed to happen why?
I was encouraged to hear Simon Powell recently getting stuck into the judiciary and the gravy train that we have put up with for so long - ACTION to stop the gravy train along with some serious investigation into the banking system can't happen soon enough - perhaps the banks should be brought to task via a thorough investigation and expose the situation on Sunday's program - look at the controversy caused by last nights program on Pig farming and Christine Rankin - but please make it a very thorough investigation and ask the hard questions!!!
When are our NZ owned banks, few as they are, Kiwibank, TSB among the few going to "buck the trend" and start being competitive? Our NZ originally owned - but now no longer - banks have been ripping us all off for years and their fees - for nothing - have even become more rapacious. Here is the challenge to ours: Prune your margins, advertise this and be proactive to enquiries. Your Govt guarantee gives you the ability to step up and take over. Are you up to the challenge?
Most NZ'rs are pathetic stuck pigs, all they do is Squeal, and loudly, why on earth don't they act for goodness sake, it is not hard at all, to change over to NZ owned!!! Kiwi Bank....The Credit Unions....TSB...PSIS etc etc, plus the Power companies... ACT!!! and stop moaning, if enough of you do it, the better off we all are...tell a friend to tell a friend, to tell a freind, all we need is a couple of sheep through the gate....plus NZ owned, are not shifting jobs off shore, to increase their billions of profit, think about it!!
Wills.
Wills - Kiwibank rates aren't much better - if at all. I'm not sure what you're saying. I checked out PSIS too. They're a fraction better. But they have the worst schedule of fees. Fees for everything - far and above any of the major banks.
So it seems to support the first comment about Kiwis just gouging other Kiwis.
The short term problem is that the major banks, simply equal or marginaly better NZ owned efforts, but we mostly lead the way, and they follow.
Cheers.
Ok. NZ owned banks lead the way. Doesn't that admit NZer are the actual culprits then - not the big bad offshore guys? They don't seem to be taking much of a lead at all.
And if it's "we", please tell me how the rest of us can pressure you into lowering your rates and stop gouging your neigbhours?
Kiwis, its time we voted with our feet.
& if the Government lead the way by Banking locally; instead of Westpac, this would be a good start..
The most important thing to remember, is locally owned business profit continue to circulate through the economy; its called the multiplier effect. Profits earned by overseas owners end up overseas, & circulate somewhere other than here....
Actions speak louder than words...I personally bank with Kiwibank; because anything good for the country is good for me
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