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I’m not convinced that ANZ’s massive profit yesterday means that we suddenly need a banking inquiry.
This is the call from Sam Stubbs, the CEO of Simplicity KiwiSaver.
He thinks there is such a thing as too much profit, he’s pointed out that banks are making close to $1000 off every Kiwi, and that if we’re prepared to launch an inquiry into supermarkets which make only $120 off each off us, then we should launch an inquiry into banks.
I think Sam Stubbs might find his call reasonably popular.
Many of us would consider a profit of nearly eye watering $2 billion.
And few of us enjoy the amount of money banks make of us.
And few of us like the fact that we allow that much profit to go offshore.
But why does that mean we need an inquiry?
What is ANZ doing wrong?
ANZ has made this profit because we went crazy on the housing market with cheap money over the last 18 months.
We bought increasingly expensive houses and we bought a lot of them.
And you can hardly accuse the banks of being too free with their lending can you?
The banks introduced LVRs on lenders before even the Reserve Bank did.
And they’re being so strict by the sounds of things that they’re even going through bank statements looking for frequent bar, gambling and restaurant spending before they approve loans.
So unless there’s a suggestion they’re playing fast and loose, I can’t see the need for an inquiry.
Other than just beating up on banks because they’re unpopular corporates like they have been for centuries.
Actually healthy profits in banks are something we should applaud.
Because it shows our economy is doing well.
And that — in the time of a pandemic and lockdowns — is not a given.
So instead of beating up on ANZ, maybe we should take heart from the fact its profit shows confidence and resilience in the New Zealand economy.
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