Thursday, 23 October 2008

Call to 'shame and stop' bank greed

RAM - Residents Action Movement Media release 22 October 2008 Tomorrow Reserve Bank governor Alan Bollard is widely predicted to slash the official cash rate by an unprecedented 1% in order to moderate the effects of the global economic crisis. The 1.3 million Kiwi homeowners paying off a mortgage will be keen to see whether the Reserve Bank's cut is matched by a reduction of the same magnitude in their trading bank's interest rate. A fortnight ago, when the Reserve Bank of Australia cut the official interest rate by 1%, the big Australian banks reduced their interest rates by only 0.8%. "In a co-ordinated move, the Aussie banks boosted their already massive profits at the expense of Aussie home buyers," said Grant Morgan, chair of RAM - Residents Action Movement. "Their New Zealand subsidiaries will adopt the same greedy tactic here as well if they think they can get away with it. We need to shame them and stop them," said Mr Morgan. INTEREST RATE SURVEY Several days ago RAM initiated a financial survey which has so far attracted around 250 responses in Auckland, Wellington and Whangarei. One of the three survey questions asks: "Do Australian-owned banks in New Zealand charge mortgage interest rates that are too high?" "90% of respondents replied yes to this question. The survey's interim results indicate that an overwhelming majority of Kiwis think the Big Four banks are interest gouging," said Oliver Woods, co-leader of RAM candidates group and a candidate for Auckland Central. "RAM is standing in the election to give voice to the voiceless who are being shafted by corporate interests like the big banks," said Mr Woods. PROTECT OUR PEOPLE CAMPAIGN RAM is launching a "Protect Our People, Not the Speculators" campaign. Different elements of the campaign include reducing the cost of home loans, removing GST from food, making speculators pay with a Financial Transaction Tax and lifting the minimum wage to $15 an hour. "RAM's Protect Our People campaign won't end on polling day," said Grant Brookes, co-leader of RAM candidates group and a candidate for Wellington Central. "We are a people's movement. So after the election, RAM will continue to mobilise the grassroots around things like winning 3% state loans for first-home buyers of modest means, and forging a broad coalition around a referendum petition to remove GST from food," said Mr Brookes. BACKGROUNDER ON THE BANKS Here are the Big Four banks in New Zealand and their Australian owners: ANZ National Bank - owned by Australia & New Zealand Banking Group (Australia). This amalgamation of the ANZ Bank and the National Bank constitutes the biggest banking operation in New Zealand, holding over one-third of home mortgages ($55 billion).

Bank of New Zealand - owned by National Australia Bank. BNZ is the second largest bank in New Zealand as measured on total lending assets. Westpac- owned by Westpac Banking Group (Australia). ASB Bank - owned by Commonwealth Bank of Australia. The Big Four banks control 90% of the banking industry in New Zealand, putting them in a near-monopoly position. The Big Four banks have been hugely profitable. In the 2007 fiscal year, the ANZ-National Bank made an after-tax profit of $1.1 billion. "We expect to make more than a billion dollars profit again in 2008," said ANZ-National chief executive Graham Hodges. (NZPA 28.7.08.) The BNZ has announced an after-tax profit of $785 million in the 12 months to 30 September 2008. And ASB Bank cornered a $515 million net profit for the 2008 fiscal year. The Australian owners of the Big Four banks enjoyed a combined after-tax profit of A$15 billion in the last financial year, partly composed of wealth generated by their subsidiaries in New Zealand.

1 comment:

Richard McGrath said...

"The Big Four banks control 90% of the banking industry in New Zealand, putting them in a near-monopoly position."

I don't think the writer above understands what a monopoly is. Even if the Aussie-owned banks (this ownership, by the way, allows the users of these banks to contribute to foreign aid) were 100% of the market in NZ, they still wouldn't comprise a monopoly. A monopoly is a state-enforced single-seller market. Currently the state does not stop competitors such as Kiwibank from entering the market (in fact it forces taxpayers to help Kiwibank).