Northland Mayor John Carter slams banks for 'ignoring' rural NZ

Far North Mayor John Carter says bank bosses should try doing the banking for a business in Opononi or Waitiki Landing to see how hard it is. Photo / files

Far North Mayor John Carter has slammed the banking sector for closing branches across the district at a time of record profits for many banks.

He also urged the sector to set up so-called banking hubs in Far North towns so businesses needing to deposit cash and people without internet access at home could still do their banking.

Regional banking hubs — where different banks share one ATM and staff are available for basic transactions — are being trialled in Martinborough, Opunake, Stoke and Twizel.

Carter said the loss of bank branches around the Far North was a safety issue.

''They're putting people at risk. In rural areas some businesses have always had to travel significant distances but when they arrived in town they used to go into a bank where there was security. Now that isn't available and people have to make deposits at ATMs. They often have significant wads of cash and you never know who's standing behind you,'' Carter said.

''The banks are making enough money. The least they could so is ensure people are safe.''

The Bank of New Zealand closed its Kaikohe branch last month despite assurances it wouldn't shut any more regional branches until 2022. Photo / Peter de Graaf

Provincial New Zealand was being ignored, he said.

''They'll tell you they have a trial going with banking hubs in three of four places but we've been waiting and waiting. Some of our people, especially up in the far Far North, already had at least an hour's travel each way to access banking services [in Kaitaia]. Now some of those people have to drive an extra hour and a quarter to Kerikeri. These guys don't understand the implications.''

The situation was similar for Hokianga towns such as Panguru or Opononi, which had previously relied on banking services in already distant Kaikohe. Banks have also been withdrawing from Dargaville.

Carter called on bank bosses to take turns doing the banking for businesses in, for example, Waitiki Landing, 90km north of Kaitaia, to get an appreciation of the distances and challenges involved.

While rural people would always have to travel to access services, banking hubs would at least bring them back to the nearest town, he said.

The mayor agreed many people were now opting to do their banking online, but large areas of the Far North had no internet or cellphone coverage — and some older people didn't want to bank online.

The Paihia branch of the ASB was the town's last full-service bank when it closed earlier this year. Photo / Peter de Graaf

New Zealand Bankers' Association chief executive Roger Beaumont said the country's six biggest banks — ANZ, ASB, BNZ, Kiwibank, TSB and Westpac — were taking part in the banking hub trial in small communities where branches were no longer viable.

Services included a smart ATM that accepted cash and coin deposits, access to online banking via a tablet, and a direct phone line to each of the banks. Personal assistance was also available.

"If the trials are successful, and they meet community needs, these banking hubs may form the basis of future banking services in small communities,'' Beaumont said.

"It's great to have interest in our banking hubs trial from regions like the Far North. Banks are closing some branches because customers prefer more convenient ways of banking. Some branches get fewer than 10 customers a day.''

The Far North currently had 17 bank branches for a population of about 70,000, or roughly one branch per 4000 people. Tourism hub Paihia no longer has a bank — the last one, the ASB, shut in March — and Westpac even pulled out its ATM. The town still has a Kiwibank agency offering limited services from a bookshop.

Russell's last bank pulled out in 2013 leaving the town with one ATM.

Kaikohe's BNZ closed down last month despite an earlier undertaking to not close any more provincial branches before 2022. Most of the other big banks retain branches in Kaikohe but with reduced hours.

Profits at the Australian-owned banks have bounced back strongly since the Covid-19 pandemic.

Westpac NZ's profit for the six months to March 31 this year was $583 million, a 98 per cent increase on the same period last year.

ANZ New Zealand's six-monthly profit jumped 18 per cent to $930 million for the same period.