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Banks refuse to release submissions on RBNZ proposals

While Westpac has released its submission to the Reserve Bank on the proposed new capital requirements, the other big Australian-owned banks are refusing to follow suit.

Wednesday, June 5th 2019, 10:52AM

Geoff Bascand

Westpac proactively released its submission nearly two weeks ago. It said the new rules could add $6,000 to an Auckland mortgage, as interest rates would need to rise to generate extra capital.

Likewise, a joint submission from the smaller New Zealand-owned banks has been released. Kiwibank, TSB, The Co-Operative Bank, and SBS warned the capital proposals could weaken competition and increase the gap between the Australian-owned big four and other lenders.

TMMOnline approached the other big Australian-owned banks, ANZ, ASB, and BNZ, for their submissions but they chose to wait until the Reserve Bank makes the submissions public.

ANZ's response will face particular scrutiny, after the bank was censured by the RBNZ over its internal capital modelling failings. ANZ has been forced to adopt a standardised model for its capital buffer, and needs to hold an extra $277 million aside, after admitting to internal failings.

Financial analysts believe the new capital rules will have a significant effect on the banking landscape.

UBS estimates they could lead add more than $2 billion to New Zealand mortgage rates each year.

While Forsyth Barr believes the rules will "level the playing field" between big and smaller banks. The firm believes the rules will be a "catalyst for ownership and structure changes", as small banks look to take advantage.

The consultation period for the capital proposals closed in May. A Reserve Bank spokeswoman confirmed submissions would be released this month, but said it has not yet picked a date.

Its proposals could force banks to increase their capital buffers by 20%-60% to guard against risk in the financial sector. The central bank estimates the extra buffer would account for 70% of banks' profits over a five year transition period.

The Reserve Bank has looked at capital rules since early 2017. Deputy Governor Geoff Bascand says the proposals are designed to make banks more "resilient to shocks that might occur only once every two hundred years".

The proposals would make New Zealand's capital adequacy regimes one of the toughest in the world. The consultation has sparked fears they could lead to increased mortgage rates.

Tags: ANZ ASB BNZ Kiwibank RBNZ Reserve Bank Westpac

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Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 15 November 2019 4:16pm

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