Press Release – New Zealand Bankers’ Association
New Zealand banks had another solid and stable year according to according to KPMGs Financial Institutions Performance Survey for the 2012 financial year. The survey shows our banks are among the best funded and regulated in the world, and fiercely …27 February 2013
New Zealand banks strong, stable and safe
New Zealand banks had another solid and stable year according to according to KPMG’s Financial Institutions Performance Survey for the 2012 financial year.
“The survey shows our banks are among the best funded and regulated in the world, and fiercely competitive. That’s good for New Zealanders and our economy,” said New Zealand Bankers’ Association chief executive Kirk Hope.
The report found that net interest margins have not changed significantly over the last year.
“Margins have remained stable. There is less heat in the deposit market because banks have met their core funding ratio requirements. This is balanced by the effects of more borrowers moving to fix their loans, a low credit growth environment, and intense competition in the mortgage market,” said Hope.
Banks have continued to face increased compliance costs as New Zealand moves into line with the new international framework for financial regulation which aims to achieve and maintain financial stability, and includes the new Basel III capital rules.
Other compliance costs include banks preparing their systems for the enhanced anti-money laundering regime, which takes effect in June 2013 and aims to protect New Zealand from financial crime.
Banks are also working to implement the Foreign Account Tax Compliance Act, which has been imposed by the United States government on all foreign financial institutions in an effort to clamp down on tax avoidance by US citizens resident in other countries.
While managing these challenges banks continue to invest heavily in New Zealand.
In 2012 banks made a direct contribution to the New Zealand economy of $4.7 billion which includes employing around 26,000 people and payments to businesses that supply goods and services to the industry. Last year banks also paid $1.3 billion in tax, which represents 16 per cent of total corporate tax paid in New Zealand.
In addition to this direct investment, banks provide essential financial services to New Zealanders by lending to meet personal and business needs, providing a safe place to save and invest money, and maintaining a world-class payments system. Banks also contribute to their communities through a range of sponsorship and volunteer initiatives.
“Our strong and stable banking sector is supporting us through the economic recovery. The sector’s strength is reflected in the fact that several New Zealand banks appear in Global Finance Magazine’s World’s 50 Safest Banks list for 2012,” added Hope.