BNZ's claim to have lent more money to businesses last year than all other banks combined has been grudgingly accepted by its rivals, but they say it's not due to any lending clampdown on their part.
"We have not changed our policy," said Graham Turley, ANZ's managing director of commercial. "We don't have any caps on our lending and we're open for business. We're writing new business all the time."
Westpac's general manager of business banking, Ian Blair, said his bank could make the same claim as BNZ, but chose not to.
"We looked at it, but thought that claim just a little bit too cute and might lead people to draw the wrong conclusion – ie, that we were the only ones lending and everyone else wasn't. That's not the way we like to portray ourselves and I don't think it has the integrity we look for in our advertising."
Banks were put under the spotlight during the recession, with Reserve Bank governor Alan Bollard demanding they continue to lend and don't simply "pull down the shutters".
Anthony Healy, director of BNZ Partners, said BNZ based its conclusion on aggregate Reserve Bank data.
"We looked at system growth [in non-personal lending] between September 08 and September 09, which was the peak of the GFC [global financial crisis]. We accounted for 58% of that system growth."
This fact backs the claim of lending more than the other banks combined.
Healy said there were two main reasons for the result.
"We did make a commitment to support New Zealand business," he said. "We could have chosen not to, we could have said `the world's going to hell in a handbasket, why don't we just stop for a while and see what happens?'
"BNZ's been around for 150 years and there was a view taken that we go in and out of cycles, and it's the banks that continue to support business and their existing clients and good new business over that cycle that tend to perform better. So we stood in the market, we were supported by our parent in terms of liquidity and we were also raising funds in the overseas market in order to continue to lend."
The other factor was "happenstance", said Healy. "We launched about 18 months ago our BNZ Partners model, which is really about building all the products and services a business would need into business centres locally rather than across different bank silos.
"We gave empowerment to local leadership teams and gave them the ability to support their customers. So we happened to be going to market with a new model that was more relevant to clients at the time this happened, so we were a bit lucky there."
Again, Westpac's Blair matched the claim.
"Last year we put on 50 local business bankers. This year we're putting on 120 business bankers – and our bankers are out there in the community in branches all over the country. They can make decisions in their own local market, whereas some of our peers decided to pull those people out of the community and put them in a call centre in Auckland."
His main issue, however, is that Westpac could also use Reserve Bank numbers to say it lent more than all other banks combined.
In calendar 2009, the aggregate figures show business lending fell by $5 billion. Include agriculture and they fell by about $3b.
"By definition, therefore, if you grew your business lending by $1, you grew more than the other banks combined," said Blair. "We, too, grew our business lending by more than $1, so we could make exactly the same claims they have made."
Individual banks report their numbers differently, making comparisons difficult, but it appears ANZ's business lending has shrunk the most of the big banks.
Turley said much of that was due to customers "deleveraging" – paying down debt – and being more cautious about further investment.
Big companies such as Fisher & Paykel and PGG Wrightson were also raising equity to pay down debt, he said, "and we have a bigger market share, therefore deleveraging has a larger impact".
"Coupled with that, we are the dominant lead manager in the debt capital markets with a market share of 45%. Over the same period we've raised $2.6b-$2.7b of long-term debt from sources other than banks. That money's been used to pay down bank debt as well.
"These things are all very positive, because it means these big business have recapitalised and repositioned long-term debt."
The low demand for business borrowing is something all the banks agree on, and they don't expect a quick turnaround.
"We'd like to be able to lend more, but there isn't as much system demand and I think that's because businesses are quite cautious at moment," said Healy. Although there was a recovery going on, "it's not a plain sailing one".
Estimated growth, year to Sept 2009
ANZ National -3.7%
*year to December 2009
Source: Bank disclosure statements, excludes mortgages and government-related lending.
Note: Banks report lending categories differently, which may affect results.
- Sunday Star Times
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