Decision on bank swaps next month

Photo / APN

The Commerce Commission expects to finally reveal next month whether it will file court action against three banks involved in its interest rate swaps probe.

The regulator said last December that it expected to file legal action against the ANZ, ASB and Westpac banks by March over their sales of interest rate swap contracts to rural customers.

Then in April, it said its initial time-frame for filing proceedings had become unrealistic and it expected to make an announcement "mid-year".

The middle of the year having well and truly passed, a commission spokeswoman said yesterday that the regulator now expected to make an "update" next month.

This update would aim to confirm whether the commission would file action against the banks.

The regulator said in June that it was continuing to receive and process complaints about the swaps, which are a financial derivative product that allows borrowers to manage the interest rate exposure on their borrowing.

They are usually offered to companies, but the commission said that from 2005 some banks offered them to rural customers throughout New Zealand.

In August 2012, the commission began looking into whether these interest swaps were being misleadingly marketed.

The commission said in May it was not clear how much money farmers had lost as a result of the alleged conduct.