Latest / Best of Business / Mike's Minute: Bank margins are going up despite major profits

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Mike's Minute: Bank margins are going up despite major profits · Best of Business

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  Speaker 1: You're listening to a podcast from newstalk zed B. Follow
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• 0:16
  Speaker 2: Battle of the Bank BS is back. B and Z,
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  Speaker 2: who announced their profit last week, talked to be strong
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  Speaker 2: competition out there, but I hope their margin went up
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  Speaker 2: up six points to two point four to three. So
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  Speaker 2: if there's so much competition, how can the margins up?
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  Speaker 2: Then came the claim from the Reserve Bank, among others,
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  Speaker 2: that the big banks are being tardy when it comes
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  Speaker 2: to passing on the RB cuts to us punters. Now
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  Speaker 2: smaller banks are sharper, apparently SBS. They claims they've hoovered
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  Speaker 2: up by almost six thousand new customers as changing banks
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  Speaker 2: has become easier. Remember, SBS last week put out their
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  Speaker 2: three point nine to nine money limited to certain people
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  Speaker 2: but a market leader nevertheless. Now tied into all of
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  Speaker 2: this is the retail bank's long held argument that the
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  Speaker 2: margins higher because they need the cushion because the Reserve
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  Speaker 2: Bank makes them store away too much money for troubled times.
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  Speaker 2: But but, but, but but those rules are changing and
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  Speaker 2: changing in the retail bank's favor. In other words, less
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  Speaker 2: money is required. Therefore, in theory, smaller margins. You can
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  Speaker 2: also put in there the simple truth that has always
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  Speaker 2: been in play. There is nothing stopping us shopping around.
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  Speaker 2: We have a good number of retail banks, and they
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  Speaker 2: do do deals. I know I've done deals. Some banks
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  Speaker 2: will shave decent margins to get your business. Trouble is
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  Speaker 2: a lot of us are too lazy to try. Moaning,
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  Speaker 2: you see, is easier than hustling. So who's right? Here?
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  Speaker 2: Are the retail banks tardy? Is it a major issue?
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  Speaker 2: Is Nikola Willis right when she says things, and by
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  Speaker 2: things she means rules need to change. I, of course
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  Speaker 2: have long argued Willis's too much hype and it's not
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  Speaker 2: all that bad. But I'll tell you what. I'm increasingly
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  Speaker 2: moving towards accepting that I might be wrong on this,
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  Speaker 2: As the RB points out, as wholesale rates drop, the
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  Speaker 2: margins have risen, and on latest numbers they are keeping
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  Speaker 2: on rising. Maybe God forbid, Adrian All was right when
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  Speaker 2: he used to come on this program and lambas the
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  Speaker 2: banks for making too many excuses. What I do know
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  Speaker 2: is the conditions are increasingly right, either through the wholesale
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  Speaker 2: rates or the changes to reserve bank rules. For us
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  Speaker 2: to see one the margins fall and two who the
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  Speaker 2: cuts to be passed through in full and faster, And
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  Speaker 2: the longer that takes to happen, the more we need
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  Speaker 2: to see the big banks potentially as a problem and
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  Speaker 2: bad actors in the economy.
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