BNZ will "happily" offer fixed home loans on wafer thin margins because it wants to win new customers and knows its competitors' margins are even thinner, the chief executive says.
Monday, November 15th 2004, 6:55AM
by The Landlord
Peter Thodey's pledge comes after fall in net profit from $548 million to to $471 million for the year to September.
He said yesterday although BNZ's margins from its "unbeatable" two-year fixed home loan campaign were tight, they were better than major rivals, such as ANZ National Bank and Westpac, who paid mortgage brokers' commissions. BNZ is the only major bank that does not use brokers.
"The BNZ is exploiting its competitive market position," Thodey said. "We can happily lend at this level".
BNZ has pledged to beat any two-year fixed home loan offered by other major banks as it chases customer growth. It offers two-year fixed home loans at 7.15 per cent interest, which has been as low as 0.50 per cent above banks' marginal cost of funds.
