The Government needs to strengthen Kiwibank or face the risk of another foreign-owned bank entering our market and sending its profits offshore, the Green Party said.
PwC’s New Zealand Banking Perspectives report predicts that another major foreign-owned bank may decide to set up in New Zealand, citing room for greater competition due to high profitability. The report also shows that bank profits rose to $2.37 billion in the first half of 2015.
“The Government should strengthen Kiwibank and allow it to speed up its transformation into a full service commercial bank, or else we risk seeing another foreign owned bank making record profits from Kiwi households and businesses,” Green Party finance spokesperson Julie Anne Genter said.
“The big Australian banks’ huge profits from New Zealand are evidence of a lack of competition in the banking market, and a stronger New Zealand-owned competitor is the best option for New Zealand.
“Foreign owned banks controlled 93 percent of our banking sector in 2014 – the last thing we need is another foreign owned bank muscling its way into New Zealand and sending its profits offshore.
“The fastest way for Kiwibank to become a full service commercial bank is through an injection of equity from the Government.
“New Zealanders know they’re getting fleeced by the big Aussie banks and a New Zealand-owned banking competitor is the best option to achieve better outcomes for Kiwis,” said Ms Genter.