New Zealand's four major trading banks, which are all Australian-owned, made more money in the four years following the global financial crisis than the four years preceding it, new figures show.
The Greens have today released a comparison of four banks - ANZ, BNZ, Westpac and ASB - prepared by the Parliamentary Library which shows they reaped $14.42 billion profit from 2008-2011, up from $14.08b between 2004-2008. That is an increase in before-tax profits of about $340 million.
Greens co-leader Russel Norman said a similar analysis for all New Zealand industries found profits had fallen by 15 per cent since the global financial crisis.
However, three of the four big Australian-owned banks reported record profits in past financial year.
"Outgoing Reserve Bank Governor Alan Bollard last week admitted that New Zealand's big four Australian-owned banks earn more out of New Zealand than banks in most other countries."
Bollard's complacency over the issue was "astounding", Norman said.
"The excess profits banks are making are simply damaging the rest of the New Zealand economy and contributing to our number one problem - a high and persistent current account deficit."
The Greens are calling on incoming Reserve Bank Governor Graeme Wheeler to promote competitive behaviour in the banking sector to stem the flow of profits offshore.
New Zealand-owned banks make up only six per cent of our banking sector, Norman said.
The Government needed to inject capital into Kiwibank and make it the Government's banker, so it could compete fairly with the bigger Australian banks, he said. Kiwibank could also be the retail arm of a Greens proposal to establish a default KiwiSaver provider.
"We can increase competition in our banking sector by strengthening Kiwibank and other New Zealand-owned banks.
"The banking sector is the lifeblood of the New Zealand economy. A strong Kiwibank is an integral part of a smart, green economy."
- © Fairfax NZ News
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