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KPMG: Small banks growing loan books at quicker rate

New Zealand’s small banks increased their lending at higher growth rates than the major banks in the three months to December, according to a new report from KPMG.

Monday, March 26th 2018, 4:26PM

by Dan Dunkley

In its latest Financial Institutions Performance Survey (FIPS), KPMG says the country’s non-major banks, such as The Co-operative Bank and TSB, grew their loan books from between roughly 2%-3.2%.

Among the non-major lenders, TSB saw the highest increase in lending. TSB’s loan book grew by 3.21% in the three months to December. At the lower end of the scale, SBS grew its loan book by 2.07%.

KPMG says New Zealand’s major banks “displayed low loan book growth rates” over the quarter. Kiwibank’s loan book grew by 0.96%, while at the lower end of the scale, ANZ’s book grew by just 0.36%.

ANZ retained the biggest slice of the New Zealand loan market with 31.32%, a slight drop of 17bps from the prior quarter. ASB remained in second with 20.86%, and BNZ third at 20%.

According to RBNZ statistics, housing loans accounted for 56% of total loans in the three months to December, a figure consistent with the prior quarter.

KPMG’s quarterly study found the New Zealand banking industry continued to grow its net profit after tax in the three months to December, albeit at a significantly slower rate than the three months to September.

The banking sector’s net profit after tax rose by just 1.56% in the three months to December. KPMG says the “sedate” increase, to $1.4bn, reflected a “slowing of the economy in the uncertain period post the election”. NPAT rose by 15.98% in the three months to September.

The KPMG survey also assesses the chances of new “challenger” banks emerging in New Zealand, following trends in other major markets such as the UK. KPMG says tech companies and new market entrants would “continue to examine how to disrupt” incumbents.

KPMG says the "oligopoly" in New Zealand differs to markets like the UK. The firm says New Zealand’s P2P lenders, and non-bank lenders in niche markets such as vehicle leasing, “may fall into the challenger bank bill”.

Tags: ANZ Kiwibank KPMG SBS TSB

« Advisers face interest-only lending restrictionsLVR changes impact on lending »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.44 4.69 4.89
ASB Bank Special - 3.95 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.10 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 4.19 4.69
HSBC Premier LVR > 80% - 3.79 - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.55 4.69 4.99
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 4.29 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 4.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.19 3.95 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - 3.95 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.35 4.49
The Co-operative Bank - Standard 5.75 4.60 4.85 4.99
TSB Bank 5.80 4.45 4.69 4.99
TSB Special - 3.95 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.15 4.29 4.59
Median 5.89 4.50 4.69 4.79

Last updated: 2 December 2018 8:39pm

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