Regulation 2013's big news: Report
The survey shows that profits rose 8.61% across the New Zealand banking industry in 2013, with an increase in lending assets of 4.35%.
But head of financial services John Kensington said regulation had been a big focus for banks in the past year and was the biggest threat to the industry’s “green shoots” over the coming 12 months.
“Before the LVR rule change the banks were probably writing 20% to 30% of their mortgages a month with a greater than 80% LVR, now, they’re probably writing 4% to 6% of them with a greater than 80% LVR. There’s going to be spirited competition for anyone who’s a good loan.”
He said banks were now less likely to offer incentives such as “put your new car on the mortgage”, which was likely to push some of that consumer lending back to finance companies.
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