The country's economic outlook may have softened but the Westpac Bank is still positive about its own situation, says its chief executive David McLean.
He says the economy has softened over the past three months because of the continued low commodity prices especially dairy, and the Christchurch rebuild having plateaued.
"We are not too worried about our risks. From the point of view of Auckland house prices, we have strong stress tests for loaning money and we are comfortable with our lending book.
"From a macro-economic point of view, the house prices are not good for the economy. All other things being equal, it forces the Reserve Bank to keep interest rates higher than they should be and therefore the dollar is higher and this doesn't help exports."
McLean says "our challenge is to manage the risk of a slowdown. We will talk to customers early and help them, especially farmers. We will help them with budgeting, provide more facilities if they need them or give them interest rate waivers.
"We haven't had farmers knocking on our doors yet but if the (low) payout continues for two seasons, then all banks will have stressed farmers."
McLean says Westpac is planning to invest more this year on technology innovation and improve customer services and productivity.
"Around the world, there are dozens of startups targeting the profitable segments of the banking and finance business. We have to invest in new tools that meet customer needs and not leave the space for the startups to come and get business.
McLean says continuing to invest in infrastructure is also important, not just in Auckland.
"For instance, we will help fund irrigation schemes which are enablers to economic growth."
• Innovation to avoid disruptive technology
• Increasing profitability to complete innovation
• Proactively manage risks in a slowing economy
• To innovate and meet customers' needs
• Cyber security - the threat environment is rapidly escalating
• Lower dairy prices and flow-on effects to other parts of the economy
The innovation we have done to date has shifted market perception to a bank that is doing things and going places - innovations such as Westpac One Internet banking platform, and Air New Zealand credit card for gaining airpoints.
• The risk of a two-speed economy between Auckland house price inflation, and exports slowing and affecting the regions - the Government needs to take a comprehensive view of the Auckland housing market.
• Longer-term intergenerational issue between superannuation and savings - people are not saving enough for their retirement and depend on taxpayer-funded support. Trouble is, the baby boomers have been working and paying for the retired people's support (superannuation), but the baby boomers are retiring and there will be a big demographic change - more retired people than workers ("the Government has a blind spot about this").
• Government should have a more active approach to improving infrastructure in the regions - infrastructure is a facilitator for economic growth.