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Retiring bank chief slams state regulation

The departing head of SBS Bank says there is far too much Government regulation of the banking industry.

Tuesday, October 5th 2021, 6:00AM 5 Comments

by Eric Frykberg

Shaun Drylie says banking managers are having to spend time and energy complying with Government rules when they could be working on innovation. 

Drylie is leaving after five years as chief executive of SBS and 35 years after he started work as a bank teller in Hokitika.  

On the way out, he has aimed some criticism at the Government for making the banking business harder than it needs to be.

He says many reforms to the financial sector have been positive.

“But my key message is that a lot of the regulations that have been put on banks to protect the customers are putting a huge amount of internal pressure on banks. 

“It means a lot of the focus of the banks is not on innovation but on regulation and compliance.”

Drylie says the challenge is to lighten the regulatory burden so that banks can spend more time developing their business rather than working hard to meet a heavy compliance regime. 

“Things like the financial services legislation, the Credit Contracts Act -  big pieces of legislation - can put a huge burden on financial organisations.

“It means their whole change programme internally is focussed on complying with new legislation rather than doing other work to innovate product and services.”

Fixing this problem will not be on Drylie's agenda, however, since he is basically leaving the banking industry behind, at least in an executive capacity.    

He plans to settle in Christchurch for family reasons. He has elderly parents a few hours drive away on the West Coast, and children going through their education which will be focussed on Christchurch. 

He will meanwhile look around for other work, perhaps in boardrooms, or perhaps in mentoring or consultancy.

Drylie leaves SBS in a strong position, with its latest profit of $55.2 million a big improvement on the previous year's $21.3 million, which was caused by big Covid-derived impairments. 

”This year will be even better.  We have got some positive growth in our balance sheet, our team morale is good and our customer satisfaction is good ...I am proud of where I leave SBS.”

Shaun Drylie concedes banks like his will always face a challenge in competing with giants like Westpac or the ANZ.

“They have about 85% of the market, so what we have to be good at is finding a niche, finding the customers that we appeal to and not trying to be all things to all people.

”Banking is very competitive, you have to be great at what you do.”

SBS was established in Invercargill in 1869, and was a building society for many years.    It became a registered bank in 2008, but remains a mutual society, owned by its customers.

Tags: SBS Shaun Drylie

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Comments from our readers

On 5 October 2021 at 7:37 am Murray Weatherston said:
Why is it that regulated executives wait till they are leaving before they let loose what they really think about their regulator?
I doubt the situation being discussed is much different than it was 12 months ago.
On 5 October 2021 at 11:34 am Amused said:
I have known Shaun for over 20 years now and he would be one of the most pro mortgage broker bankers that I have ever come across. Such a shame that Shaun wasn't appointed to the head of third party role at ASB when he was working for them. I refuse to believe that ASB would be in the state they are currently if Shaun had been at their helm instead.

Shaun is the kind of banker who is totally focused on customers and streamlining banking processes. He recognised a long time ago that the mortgage broker channel was the future for the majority of borrowers in New Zealand wanting a home loan. SBS have been lucky to have his experience and expertise whilst he has worked there and his departure now is very sad for the banking industry as a whole. We really can't afford to lose people like Shaun from this industry as they are a rarity nowadays being able to speak to people without a prepared script and appointed to senior management roles based on their proven results instead of whatever is "politically correct" currently. Respectfully Shaun would wipe the floor with most of the people currently charge at the banks now who oversee the third party channel.

Shaun's comments around the Credit Contracts Act changes are spot on as it's obvious to any experienced lender that parts of the changes to the Act have been written by back office Government bureaucrats without any proper consultation with front line lenders who interact with customers on a day to day basis. A sad sign of the times nowadays in New Zealand.

Best wishes Shaun. We wish you well for the future.



On 5 October 2021 at 1:04 pm krish@mortgagesuite.co.nz said:
About time someone like Shaun spoke up. These days Banking and Mortgage Broking is more about the best outcome for compliance as opposed to best outcome for the customers.
On 5 October 2021 at 9:13 pm Maxwell K said:
Seems to me someone like Heartland Bank should grab a man with such talent.
On 5 October 2021 at 10:05 pm two cents said:
We're in one of those awful pendulum swings when you think things can't get any more impossible and then it does. No wonder a lot of good people are leaving.

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Lender Flt 1yr 2yr 3yr
AIA 4.55 ▲2.99 ▲3.45 ▲3.69
ANZ 4.59 3.39 3.85 4.09
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.79 3.25 3.49
ASB Back My Build ▲2.04 - - -
ASB Bank 4.45 ▲2.99 ▲3.45 ▲3.69
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▲2.99 ▲3.45 ▲3.69
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.70 ▲3.59 ▲4.05 ▲4.29
BNZ - TotalMoney 4.70 - - -
CFML Loans ▲5.15 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.45 2.85 3.15
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.80 4.00 4.34
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.95 3.15 3.49
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 3.05 3.45 3.75
SBS Bank Special - 2.55 2.95 3.25
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.65 - -
The Co-operative Bank - Owner Occ ▲4.55 2.79 3.25 3.49
The Co-operative Bank - Standard ▲4.55 3.59 4.05 4.29
TSB Bank 5.34 3.35 3.75 4.05
TSB Special 4.54 2.55 2.95 3.25
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.84 3.45 3.85 4.09
Westpac - Offset 4.84 - - -
Westpac Special - 2.85 3.25 3.49
Median 4.57 2.99 3.45 3.49

Last updated: 15 October 2021 8:56am

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