New Zealand's big four banks have been raking in money. Image / Getty Images
New Zealand's big four banks have been raking in money. Image / Getty Images
The issue of record bank profits has been flung into national headlines this week.
This comes off the back of ANZ’s $2.3 billion profit, ASB’s $1.47 billion, BNZ’s $1.4 billion and Westpac’s $1.1 billion.
The figures were so staggering that Prime Minister Jacinda Ardern hit out, saying it was wrongfor banks to be making massive profits at a time when New Zealanders are struggling to make ends meet.
NZ Herald business editor at large Liam Dann tells the Front Page podcast that conventional economic thinking has long suggested that profitable banks are good for the New Zealand economy.
But the economic conditions that existed through the Global Financial Crisis and the stock market crash in the 80s aren’t at play in the current market.
The economic forces at the moment are quite different to those which led to financial catastrophes. Despite this, Dann warns that the Government should be careful how it goes about challenging the profitability of the country’s banks.
“The Government needs to be a bit careful when they’re criticising the banks, because what you’re really talking about is competition and the regulation of the banking marketing,” says Dann.
“And a lot of those things are in the hands of the Government itself.”
