Latest / Early Edition with Ryan Bridge / Ryan Bridge: Kiwibank's result proves there is competition for banks

Transcript

Ryan Bridge: Kiwibank's result proves there is competition for banks · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: We just heard from Clear Matthews. Now I tell you
• 0:02
  Speaker 1: what I think about banking. There's a lot of noise
• 0:04
  Speaker 1: about banks in this country. Let's be honest. Results, though,
• 0:07
  Speaker 1: speak for themselves. If I had a dollar for every
• 0:09
  Speaker 1: time a politician said there's no competition in the banking sector,
• 0:12
  Speaker 1: that they're price gourging tyrants, I'd be richer than Elon
• 0:16
  Speaker 1: Musk and Jeff Bezos combined. But let's take a close look,
• 0:19
  Speaker 1: shall we. Kiwi Bank, Michael Cullen's Little Kiwi challenger reported
• 0:23
  Speaker 1: annual profit down nine percent yesterday. Why their interest margins
• 0:26
  Speaker 1: were down? That's the difference between the revenue they make
• 0:29
  Speaker 1: from charging us interest on our loans and the cost
• 0:32
  Speaker 1: of paying us interest on our savings. Why did this happen? Well,
• 0:35
  Speaker 1: According to the CEO, in part competition yes told interest
• 0:41
  Speaker 1: dot Co dot In zed that A n Z, which
• 0:43
  Speaker 1: is the biggest lender in the country for home loans,
• 0:45
  Speaker 1: was aggressively offering cash backs. He said, quote that was
• 0:49
  Speaker 1: very competitive. What that means for us customers is that
• 0:53
  Speaker 1: banks are fighting for our business aggressively. It seems it
• 0:57
  Speaker 1: means we get deals, we get cash backs, we get
• 0:59
  Speaker 1: more competitive rate. Does this sound like a Sicilian mafia,
• 1:02
  Speaker 1: a cartel and Oligopoli on steroids. Know what it tells
• 1:06
  Speaker 1: you is that there is competition. We have twenty seven
• 1:10
  Speaker 1: registered banks in this country to choose from. There is
• 1:12
  Speaker 1: a butt. The big four are Ossie owned and control
• 1:16
  Speaker 1: eighty odd percent of the market. They have access to
• 1:18
  Speaker 1: more capital, They've got deeper pockets. They can basically steamroll challenges.
• 1:22
  Speaker 1: So how do we solve that problem, Winston says, renationalize
• 1:26
  Speaker 1: B and Z, which is the nuclear option that the
• 1:29
  Speaker 1: state can't afford. The answer lies again in the results,
• 1:32
  Speaker 1: which show that Kibibank is basically foregoing margins to grow share.
• 1:37
  Speaker 1: Its home loan market was up from eight percent to
• 1:40
  Speaker 1: eleven percent on last year. It's benefiting from changes that
• 1:44
  Speaker 1: have been made to capital requirements, how much money they
• 1:46
  Speaker 1: have to hold, and a capital raise four hundred million
• 1:49
  Speaker 1: odd dollars. Next will surely come mergers, tesB anyone. The
• 1:55
  Speaker 1: other thing it could use, of course, is more customers
• 1:58
  Speaker 1: and that choice, that power is in our hands, should
• 2:02
  Speaker 1: we choose to use it. For more from early edition
• 2:06
  Speaker 1: with Ryan Bridge. Listen live to News Talks at B
• 2:09
  Speaker 1: from five am weekdays, or follow the podcast on iHeartRadio,