ANZ worried that it may be required to hold sufficient reserves

Written By: - Date published: 7:05 am, July 3rd, 2019 - 105 comments
Categories: business, capitalism, economy, Economy, Financial markets - Tags:

ANZ has been in the news lately for a variety of reasons, none of them good.  The latest is that the banking corporate whose local branch is chaired by the former National Prime Minister is now threatening some sort of economic genocide on the country by withdrawing back to Australia.  All because the Reserve Bank wants them to hold more capital just to make sure that if there is a run on that particular bank it will not fall over.

My initial response?  Tell them to f*(k off.  They are an Australian corporate whose only reason for being is to pull huge amounts of money out of the local economy to enrich their predominately Australian share holders.

Maybe we should invite them to act like seagulls.  Maybe the Government needs to strengthen Kiwibank and tell ANZ to leave the NZ and go back to A.

Liam Damm has the details in the Herald:

ANZ group chief executive Shayne Elliott has threatened to review the “size, nature and operations” of the New Zealand business if the Reserve Bank implements its proposed changes to capital ratios, according to his submission released publicly today.

The capital changes would see ANZ Group reduce investment and reallocate resources away from New Zealand to more profitable businesses, Elliott says.

“This may also lead the New Zealand business to reduce operational costs (including employee costs).”

It may also require ANZ Group to “dispose, or cease operation, of the relevant underperforming New Zealand assets or businesses”.

Another possibility was that some customer relationships in New Zealand could be directly managed out of Australia, he says.

Let us review recent events and what has caused ANZ to review its very profitable position in the New Zealand market.

It has:

  • Lost its right to calculate its capital ratios because of a persistent failure to calculate risk, and this has been described by someone who should know as “very concerning behaviour by our biggest and most profitable bank” and “[t]his is as strong a censure of a bank as I have ever seen in New Zealand.”
  • Sold to its former chief executive the palatial home that he was meant to rent out at a market rental at what appears to be a significant discount.
  • Sacked the former chief executive for “discrepancies” in the way his expenses, including the provision of limousines and the storage of his wine cellar, were handled.
  • Engaged in a full court press PR campaign to divert attention.

The background to this particular issue is the Reserve Bank’s review of the capital holding adequacy of the trading banks.  Basically the Reserve Bank has floated the idea that trading banks should hold more money in reserve compared to how much they lend and factoring in the risk of their loans.  The Reserve Bank is being cautious.  If there is another global financial crisis then banks holding sufficient reserves may avert a disaster.

And the claims of radical change appear to be overreach by ANZ because in January this year its risk capital holding was assessed to be 19%, well above the current requirement and even above the proposed requirement.

The other banks are also complaining.  But interestingly the IMF, the OECD and American stock market index S&P all support the proposal.

A final decision is expected in November.  Expect a lot of corporate funded churn before then.

105 comments on “ANZ worried that it may be required to hold sufficient reserves”

  1. Doogs 1

    FO is the only response to a fat cat who wants to play truth dare or promise with the NZ public. If businesses want to follow them over the Tassie like lap dogs, let them. 

  2. Dukeofurl 2

    paid a $4 bill dividend to its Australian parent last year, yet for 'tax purposes' had only a $1.965 bill 'profit'. Clearly they are awash with   cash flow

    • Phil 2.1

      You've misunderstood that completely.

      The dividend was $4.6b, and was back-to-back matched with the parent paying $3b for more shares in the NZ business. I believe the transaction has something to do with the arcane (but totally legal) world of tax imputation. 

      Anyway, ANZ made $1.95b in profit for the year and paid out (effectively) $1.6b in dividend. There's plenty of reasons to dislike those numbers in and of themselves without implying some kind of tax dodge, Duke. 

      • Dukeofurl 2.1.1

        Hardly helps if its a money go round. Yes   I can see the companies register showing a new allocation of shares (2849679411)  to ANZ Funds Pty Ltd

        But then sending the money straight back ?

        • Phil 2.1.1.1

          It's not a money-go-round, as the $3b was *already* sitting on the ANZ-NZ balance sheet as retained earnings (i.e. profits made in previous periods, but not yet distributed to the shareholder).

          The transaction just moved the money from one accounting form of equity (retained earnings) to another form (ordinary shares). There's literally no cashflow impact of consequence.  

  3. patricia bremner1000 3

    NZers should find another more NZ compliant bank.  Remind them they are not the only fish in the sea.

  4. patricia bremner 4

    Sorry about the 1000, 

    • Anne 4.1

      Yes, I wondered about that 1000. Thought perhaps you had been counting your comments and you recently reached 1000 and were skiting about it. 😛

      • patricia bremner 4.1.1

        No Anne lol,  I was agreeing with Ad and thought the cursor hadn't workedangry lol

  5. tc 5

    Terrific opportunity for the NZ media to show its true colours pimping up the banks spin rather than taking a neutral/historical position and asking the obvious questions.

    Profit gouging, tax avoidance, branch closure, service reductions, fat cat packages, shonky conflict of interests etc. These banks are oligopolies like fletchers and CHH are in building supplies, look out for similar tunes from the usual players.

    a grand corporate sponsored musical looks imminent with the GE coming up. National providing their CT styled chorus lines as the political branch office.

     

     

  6. Sacha 6

    Unfortunately our media companies get way too much income from Aussie-owned bank advertising to seriously question bullshit claims that we are an unprofitable part of their operations.

    Hopefully customers will vote with our feet. That's something we have control over.

  7. mpledger 7

    (IIRC) The govt does its banking with the ANZ.   I'm sure there are lots of banks that would like a slice of that action.

  8. Richard 8

    I know I am far from the first to say this but the problem is private ownership of banks.  The only ones able to make money out of the provision of money should be the democratically run state.

    How about we order ACC to sell back their share in Kiwi Bank for a dollar.  Get them to buy another barely-minority shareholding and then immediately sell it back for a dollar again.  Rinse and repeat.  Use the funds pulled from ACC as a war chest to run all privately owned banks out of the country.  Start progressively increasing the tax on banking profits until it is effectively 100%.

    More money coming back into public hands could be allocated to a new Ministry of Works that can be tasked with the delivery of the huge infrastructural investment required in the coming years.

    • gsays 8.1

      I vote for that.

      Action akin to above is probably more pressing when you consider the likes of FB wanting to get into financial services.

      If the state can't get them to pay their fair share of tax, what chance do citizens have against them?

    • alwyn 8.2

      What a fascinating idea. Who are they going to sell the ownership to for a dollar? And what are they going to do when some poor bugger is injured in an accident and left a paraplegic? Are they then supposed to tell him. "Sorry buddy but we don't have any funds to pay for your care, because we spent them on Dickies' dumb idea" and then dump him on the street?

      The ACC reserves are there to provide care for people who are injured in accidents. The reserves aren't there for silly buggers like you, or like some of our stupider MPs to spend on their personal hobbyhorses.

       

      • Blazer 8.2.1

        Aren't you aware that ACC makes investments in a broad range of categories Alwyn?

        • alwyn 8.2.1.1

          Of course I am old chap.

          However I can't think of any cases where they have spent a few billion dollars buying up shares in a company and then selling the lot to one of their mates for a dollar. That is what Richard appears to be advocating.

          Can you give me an example of that? I will then really start screaming about it.

          The ACC reserves are intended to provide for the future costs of today's accidents. In the case I quoted the average person might need 24/7 care for an average of perhaps 20 years. The reserves are there to pay for that. If the reserves get to large you shouldn't spend them on someone's wet dream of buying up companies and then giving them away. You should cut the levy paid by workers. If the reserves are too small then you increase the levy.

          • KJT 8.2.1.1.1

            Note that ACC, worked fine for years as a PAYGO. And certainly looks like it could continue like that for the foreseeable future. There was no need at all for reserves against past claims, as it is, and will be, fully funded from levies.

            The reserves are simply money stolen from levy payers and claimants, to fatten it up to look like a private insurance company for the planned sale. Before even National realised that wouldn't play, with voters.

            Of course it also helped make the Government books look better. A bonus for National to hide their incompetence.

      • Richard 8.2.2

        Not suggesting that all of ACC's reserves are taken for this.  Just what is calculated to be required.  The benefits of having banking profit returned to the state will give the freedom in future to put money back into ACC if that is what the democratically elected state decides to do.  The previous government effectively already did just this (pull money out of ACC).  Its just that they did it to cook the books to show a surplus, not to make a strategic investment in the nation's future.  They also tried to say that while they were technically selling a share, they weren't really because ACC is also state owned.  Given that, they shouldn't mind ACC giving it back.  After all we're all on the same team right?

        • Dukeofurl 8.2.2.1

          The Banks make money by borrowing  short and lending long.

          eg ANZ Interest income 2018 $6.391 bill

          ANZ interest expense $ 3.24 bill

          Thats a margin of  50% on their borrowing costs, as I said  borrowing short ( 3 months – 36 months) and lending long  -25 years, is very profitable.

          The banks capital allows them to borrow from depositors and from the money market in a ratio of roughly  12 to 1.

           

      • Michael 8.2.3

        If only ACC did spend the money it extracts from us all "to provide care for people who are injured in accidents". Instead, it has over $40bn stashed away in its investment accounts that it does not spend at all. Of the money ACC does spend, a lot of it goes on buying doctors, and other riders on its corporate gravy train, to tell it what it wants to hear. As a result, far too many sufferers of personal injury get shafted by this outfit and are left to deal with the costs of those injuries by themselves. As for ANZ, they are a rapacious bunch of bastards who should be close down and replaced by something by and for New Zealanders (the "A" part seems to be more trouble to us than it is worth). For my money (little of it that there is), I think the Bank of New Zealand should be renationalised, amalgamated with Kiwi Bank to provide a boring, low cost, low risk home and small business) lending service; it should also manage the Crown accounts to provide it with a stable asset backing.

        • alwyn 8.2.3.1

          If the RBNZ increases the required Capital requirements to the point where an adequate return on the capital required as reserves is impossible to attain you can expect all the banks to adopt the style you propose. It will however be only loans for house mortgages. Loans to small businesses simply won't occur. They are far to risky to be considered. God knows who will provide them of course. They'll probably let someone like that idiot Twyford run loose and he'll blow the lot.

          You see the reserves backing small business loans are necessarily greater than those for house loans. The chances of failure to repay the loan are greater.

          There are also limits, or at teast there were limits, on the amount of capital that Australian domiciled banks are allowed to put into overseas domiciled subsidiary banks. If they look like exceeding that limit they may simply cut back in New Zealand and invest elsewhere.

          I have made no comment on whether the RBNZ requirements are correct or not. I am simply not close enough to the topic to give a considered opinion. Neither I suspect is anyone else talking about it on this site.  

          As for the comment "should also manage the Crown accounts to provide it with a stable asset backing". The money isn't like Scrooge McDuck's vault you know. It is money that goes in and out at a great rate and in no way is it bank reserves. It is merely money that they owe the Crown. The amount that the average household has in the bank is far more stable The reason that Westpac, rather than Kiwibank handle it is because they are far better able to handle the huge number of transactions that occur. There are, for example about 700,000 payments made every second Monday to people getting National Super, and that is merely one of the things they must handle.

          • Blazer 8.2.3.1.1

            The brave bankers usually require small business to have RE as security for loans Alwyn.

            You need to read Poission's post further down which exposes the ANZ  banks absolute b/s regarding Cap requirements.

    • Nic the NZer 8.3

      Think you have got somewhat off track here. The only institution able to issue and tax NZ currency is essentially a government department, the RBNZ. The RBNZ also maintains the accounting system inside which payments are made between commercial banks and to/from government.

      When a commercial bank issues funds (which they do) they issue liabilities on their own balance sheets (basically bank deposits). They are largely expected to pay out those liabilities on demand (when deposits are withdrawn) by converting them into the NZ currency which they don't issue.

      The upshot of all this is that the governments ability to spend is in no way constrained or influenced by its income or payments made to it.

      • Pat 8.3.1

        thats true but unfortunately the mechanism for issuing that spending power is in the hands of the private banks, not to mention the private wealth invested….is all very well to write off their influence but when your ATM wont issue cash or your eftpos dont work things tend to shut down( and most kiwis live paycheque to pay cheque)..and then theres the lost capital.

        Under current settings they are required and with the whole model at risk the RBNZ is right to require the extra security

        • Nic the NZer 8.3.1.1

          Not sure what your getting at here. No bank shutdown (or threatened to shutdown) atms the last time (or any time) the govt passed a budget.

          • Pat 8.3.1.1.1

            The point is the private banks are the infrastructure for the financial system…the RBNZ may issue the currency but they need the infrastructure for the operation but more importantly they need the 'faith' in that infrastructure

            • Nic the NZer 8.3.1.1.1.1

              Still not understanding what the point of the comment is. The government spends in monies it controls and issues itself. The infrastructure doesn't fail or kick up a fuss when this occurs so does not constrain that happening. Ergo if the government rejects spending it is making that decision of its own volition and carries responsibility for the consequences. The original comment was implying private banking constrains govt spending where no such constraint occurs.

              • Pat

                If by original comment you mean Richard @ 8 then Im struggling to see where he implies such constraint but he certainly does rail against the private banks ability to profit from the creation of monies.

                Essentially he is simply proposing a convoluted method of nationalising the private banks…..capital flight anyone?

                The RBNZ is charged with maintaining the security of the banking system,  not demolishing it.

                • Blazer

                  Who  exactly do you think should have the power to create money if not sovereign Governments?

                   

                   

                  • Pat

                    The reality is everyone has the power to create 'money'…the only question of import is whether that 'money' is of use and that relies on trust (or faith if you prefer).

                    In the case under discussion (NZ banking) the RBNZ are charged with maintaining trust in the NZD

                    • Blazer

                      The topic just got broader…'Essentially he is simply proposing a convoluted method of nationalising the private banks…..capital flight anyone? …and this nonsense..

                      ''

                      The reality is everyone has the power to create 'money'…the only question of import is whether that 'money' is of use and that relies on trust (or faith if you prefer)'

                      You have sidestepped my question,but I can see why.

                       

                  • Pat

                    the topic IS broad…you cant discuss bank stability and ignore the implications (well you can but it is foolish to do so)

                    and nonsense?….Bitcoin, Libra and if I want Patdollars

                  • Pat

                    and an afterthought,,,,wasnt it you that broadened the topic by asking who should have the power to create money?

  9. fustercluck 9

    I am a conservative and I believe that a well-regulated banking sector is utterly necessary. Especially given we lack a government-backed deposit insurance scheme. If the Aussie banks do not want to do business on a sound footing, they can go away.

    • AB 9.1

      I'm also a conservative and my inclination is to send my well-regulated militia into your well-regulated bank and have a free and fair exchange in the marketplace of ideas.

  10. infused 10

    yeah, no. I want them here.

    They are the only bank that got behind me.

    Kiwibank – couldn't even get a meeting with them
    TSB – fucking useless as I've explained many times

    ANZ will go above and beyond now for me.

    All banks are bitching about the change, and Kiwibank even said they wouldn't be able to operate under it.

  11. Philj 12

    Yes, the Banks are a major issue so there will be little change to BAU. Kiwibank should be supported by Kiwis and Government.

  12. ankerawshark 13

    https://thespinoff.co.nz/society/03-07-2019/everybody-stop-being-so-mean-to-anz-immediately/

     

    Toby Manhire at his brilliant best.  Oh and click on the link about stop being so mean to John Key…..very funny

    • Dennis Frank 13.1

      Yeah he did that well,  a recipe for much grinning, reminds us that the satirist performs a valuable social function.  I'd seen that woman doing mock sympathy for JK long ago.

  13. mosa 14

    This is the perfect opportunity for kiwis to show ANZ the finger.

    It would have happened 40 years ago but not today in our almost pure corporate state.

    We are still in love with debt and neo liberalisim that ANZ will get its way after all we sold out to these guys years ago.

    I think the ANZ logo is a good representation of the massively enriched Aussie shareholders.

    http://norightturn.blogspot.com/2019/07/anz-should-fuck-off.html

    • bewildered 14.1

      I think the average kiwis is bit smarter than you think,  They won’t adopt your moronic suggestion that  goes against their own self interests and interests of the country as a whole  in pursuit of 1 minute of satisfaction in telling a bank to  stick it 

      • Dennis Frank 14.1.1

        Huh?  What part of being exploited by aussies is smart?  Oh, the govt banks there, I get it.  If the govt does it, must be smart.  Trumpian logic (but only when govt does what Trump tells it).

      • mosa 14.1.2

        Actually if we were smart we would make sure we got more than one minutes satisfaction and let ANZ go back across the Tasman and with out the huge profits they make at our countries exspense.

        The only thing " moronic " is you and people just like you that think that way about corporate greed.

  14. Poission 15

    The Bank of England from time to time provides open dialogue (to formulate discussion) without the pseudo sophistry that is expanded by banks and financial commentators.

    Framing the problem of  bank equity Jenkins(2012) examined the fallacies surrounding increased capital.

    The first myth is that we must choose between safety and growth. The banking lobby would have us believe that higher capital requirements and lower leverage will damage economic growth and retard the recovery. “Increase our capital requirements and we will reduce our lending!” You have heard it before. I can hear now. But take a minute to do the math. Bank “A” has a trillion euro balance sheet supported by 50 billion of equity. Now, let’s double the equity required to 100 billion and retire 50 billion of bank debt. Has the balance sheet shrunk? No. Has the bank had to cut credit? No. Does more capital necessarily lead to less lending? No. So does society have to choose between safety and growth? No. So much for myth number one.* But if you fall for this fallacy you will agonize between doing what is right for the economy short term and what is right for stability and your country long term. Bankers have exploited this fear …

    The bad news is that the old guard did such a good job of scaring the bejezzus out of politicians that the regulatory landscape still reflects the shibboleths of the last five years. Secondly, a few of the high profile survivors of the trauma still believe in these fantasies – or at least want you to believe. Naturally these titans must be the smartest of us all right – subsequent scandals not-withstanding? Last but not least is the fact that many western financial institutions have yet to come clean because to do so would reveal their fragility and trigger the very equity issuance which they maintain to be unnecessary. And here you would be right to ask: in such cases would the capital be available? Answer: for the viable firm yes – perhaps not at the price that current shareholders would like to see but most certainly at a price which new shareholders would embrace. At the right price, the money would come – although the management might have to go. If the equity is not available at any price then the institution should go as well. And there’s the rub.

    https://www.bankofengland.co.uk/-/media/boe/files/speech/2012/a-debate-framed-by-fallacies

     

    • Blazer 15.1

      Very good.

      Can you email that to the Chairman of ANZ!

    • Nic the NZer 15.2

      Must say i am surprised to see this hosted by the BoE. Its absolutely true of course, most people have the mistaken impression that banks lend out existing monies when in fact they create monies by lending. This fact turns most economic analysis of banks on its head.

      Most unfortunately those ignorant of the implications includes former heads of the RBNZ such as Don Brash.

      • Phil 15.2.1

        I'm also surprised to see this on the BoE website, but possibly for very different reasons to you… Take this sentence:

        Now, let’s double the equity required to 100 billion and retire 50 billion of bank debt.

        Just shift some debt around and create new equity… sound's simple, right?

        What Jenkin's has casually done there with a wave of the hand is convert $50b of stable-value debt instruments with fixed interest payments, and turned it into a variable-value equity with uncertain dividend streams. The glaringly obvious problem is that the people who invested in the debt *want* the stability and certainty, otherwise they would have invested in the (riskier) equity in the first place. 

        • Nic the NZer 15.2.1.1

          Yep, thats why it lowers risk. The bank (more properly its executive staff) doesn't get to pass on as much the risk that it can't make fixed payments in the future. When growing by borrowing a lot of this risk is transferred to the government or depositors. Its possible as a result shareholders will require more compensation for capital as a result.

          The important point however is that the banks actual capacity to lend in not altered by this change.

          • Phil 15.2.1.1.1

            More capital in a bank lowers the risk of the bank failing, yes.

            The speech from Jenkins glazes over that he's requiring $50b of debt holders to willingly take on more risk – they're no longer insulated from first loss by the $50b of original capital, they're now equally ranked as first loss in the $100b. Those investors will, correctly, demand a higher rate of return for the extra risk they're now taking on.

            It's not at all certain how the overall cost of funding that bank will change – could be up, could be down.

            If the overall cost change is upwards, then the bank is going to require each loan it makes to meet a new, higher, expected revenue threshold. Deals that were previously on the margin will now unprofitable and won't be approved. That's where the decline in lending capacity comes from. 

      • Phil 15.2.2

         they [Banks] create monies by lending. 

        Pretty certain we've had this debate here before, no? 🙂

        What you've said is true, BUT banks cannot create money ad infinitum, specifically because they run up against the capital adequacy limits imposed by regulators/central banks (they also run up liquidity/funding limits, but that's a separate issue altogether).  

        Or, to put it in accounting terms, the process of lending a buck creates +$1 of assets and +$1 of liabilities. It doesn't create any capital.

         

        • Nic the NZer 15.2.2.1

           

          Well your dead wrong on this.

          Bank capital is the difference between assets and liabilities. Bank assets include the value of mortgage securities held on its balance sheet. So bank lending does (or can) directly create capital itself. The trick for the bank is to lend profitably so that its assets grow faster than its liabilities. Thats how a bank creates its own capital via lending.

          • Phil 15.2.2.1.1

            I disagree with your disagreement. 

            If a bank makes a loan today, it has to hold sufficient capital against that loan *today*. It cannot wait in the expectation/hope of future profitability over the next 20 years to cover the capital requirements that exist for that loan right now.

            The bank could rely on capital generated from (presumably) past lending decisions to back a loan made today, but it doesn't change the fact that a bank  cannot throw all caution to the wind and create as much money as it wants today. 

        • Blazer 15.2.2.2

          So how does fractional reserve banking work then?

          • Nic the NZer 15.2.2.2.1

            Reserves and capital are slightly different things. The fractional reserve concept is mostly missleading anyway. Banks keep a smallish amount of liquid funds to make payments to other institutions as required. This doesn't constitute a fixed fraction of their lending and is largely not even enforced by regulation. At a price they can also immediately source these from the RBNZ if needed.

            The operative constraint on bank lending is the volume and risk level of opportunities presented by potential borrowers.

            • Blazer 15.2.2.2.1.1

              Banks have many,many more products to sell apart from mortgage securities.

               

              Try explaining the security of this market…

               

              'According to the most recent data from the Bank for International Settlements (BIS), the total notional amounts outstanding for contracts in the derivatives market is an estimated $542.4 trillion. But the gross market value of all contracts to be significantly less: approximately $12.7 trillion. '

               

              • Pat

                the problem with derivatives is that no one (not even the banks) can work out where the ultimate liability lands…its conceivable that an insolvent bank could be insuring its own losses

              • Phil

                There's a short explanation and a long explanation. Try this for starters:

                https://www.investopedia.com/terms/n/notionalprincipalamount.asp

                Basically, the notional amount (the $542 trillion in your quote) is an accounting contrivance that is largely meaningless in any practical way for the risk of a bank. The real financial cost to the sector (if one party to every derivative contract fails) is the $12.7 trillion. 

                • Blazer

                  So only…'$12,700,000,000,000…small change.

                  • Phil

                    No-one's arguing $12 trillion is small.

                    I would, on the other hand, strongly argue that the way the $542 trillion notional figure is oft quoted in isolation as a 'bad thing' by banking critics is nothing more than ignorant scaremongering. 

                    • Blazer

                      so you view it as a 'good thing'?

                      A desirable product of investment!

                    • Phil

                      (1) Don't put words in my mouth that I didn't say, thank you very much.  

                      (2) Derivatives are complex. An 'unsophisticated' or retail investor, except in very rare circumstances, probably shouldn't be going anywhere near them. 

                      However, it is absolutely and indisputably prudent for a bank or a major corporation to engage in a whole range of derivative products as part of their hedging strategy. 

                    • Duncan []

                      Phil your depiction of bank capital adequacy requirements and understanding of how they maintain capital is spot on and something all should know. 

                      But the derivatives are off balance sheet items and you are wrong to dismiss the impact on financial stability. 

                      Remember it was only 60 billion of CDOs that almost brought the financial  system to complete annihilation. 

                      And that 60 billion required trillions in bail outs.

                    • Phil

                      Remember it was only 60 billion of CDOs that almost brought the financial  system to complete annihilation. 

                      I'd challenge that on two fronts. 

                      2) 'Derivatives' is a catch-all term for a wide range of financial instruments, most of which are pretty bland in purpose and accounting treatment to someone with a grasp of the industry. It's unfair to lump a vanilla swap or put-option in with an exotic hybrid. It'd be like saying you dislike all wine just because you hate Malbec. 

                      1) Years of rapacious lending to people who couldn't afford to pay back the loans is what caused the GFC. The CDO and RMBS were instruments that transferred the financial losses to other parties, but they weren't the *cause*. They were more like the canary in the coal mine. 

  15. AB 16

    Telling them to FO seems like the nice, polite option. Not too disruptive and much better than they deserve – which is to be locked up and ordered to hand back years and years of our stolen wealth. 

  16. soddenleaf 17

    ANZ makes money by paying less out to depositors than other banks.

    No wonder they aren't taking on deposits. Profits too good.

    Bring them into line, or all the bank's will have to join ANZ, depositors will

    find it hard to deposit as there will be a rush to the bottom.

    Now what exactly is ANZ reasoning for a different ratio? Does their board understand their profits will drop as they are forced to compete with the other banks also carrying less liquidity?

    They've been caught, now they need to get in line, profits will fall.

     

  17. A 18

    Yea I'm shifting banks.  Never really thought much of them but I ended up there after Countrywide merged with National, then National was incorporated with ANZ.

    Going with Cooperative because cost of moving money internationally is a flat fee.   Much better.

  18. peterlepaysan 19

    If the anz pulled out of NZ, would the other banks cry?

    • Pat 19.1

      If ANZ pulled out they would either have to sell their book or exit over time….and if they dont want to destroy their capital theyd have to do it responsibly….one thing you can be sure of, they would try to exit with as much as possible and that means not crashing the market…of course that may happen regardless

      • Phil 19.1.1

        If ANZ pulled out they would either have to sell their book or exit over time

        There is, realistically, only one group of potential buyers for a major New Zealand bank; the Chinese banking behemoths that already have a small presence here (i.e. BoC, CCB, ICBC). 

        Would the NZ public at-large accept our biggest bank being Chinese-owned? 

        ¯\_(ツ)_/¯

        • Pat 19.1.1.1

          would they have any choice?….but to answer your question I suspect we would be less accepting (trusting?) of Chinese ownership as opposed to Australian, certainly in the short term, not that the outcomes for customers is likely to be markedly different

          • Phil 19.1.1.1.1

            ANZ-Aus is the smallest of the big-4 banks in Australia while their subsidiary ANZ-NZ is the largest of the big-4 here. That means they're over-exposed to NZ, relative to their peers (NAB, CBA, WBG). 

            The only other alternative I can see is that ANZ-Aus might want to reduce their over-exposure to New Zealand and cede market share over time. It's not inconceivable that they see NZ as a country risk they are overexposed to and they can use the RBNZ's capital proposals as an excuse. 

            • Blazer 19.1.1.1.1.1

              '. That means they're over-exposed to NZ, relative to their peers (NAB, CBA, WBG). 

              As the NZ operations are extremely profitable this represents a problem how?

               

              Woolworths has huge investments in NZ ,while their main competitor inAustralia,Coles does not.

              So what!

              • Phil

                Over the last year or so, both APRA and the RBA have been saying publicly that two of the biggest risks to the *Australian* financial system are Auckland house prices and the NZ dairy sector. 

                • Blazer

                  Can you provide a link to those concerns?

                   

                  It seems when it suits the NZ operations are independent..as the banks often mentioned when a call for a Royal Com in NZ as per the recent,revealing Australian one.

            • Pat 19.1.1.1.1.2

              Ceding market share I suspect is planned already regardless….given their exposure to both rural and Auckland property and the near term risks. (not to mention the link to Oz property)…and why Orr has my vote, even without the dubious accounting they are all exposed to a market correction big time, but especially ANZ

              • Pat

                and having said that its probably all too late in any case

                • Phil

                  exposed to a market correction big time

                  I know I'm in the minority here, but I tend to the view that our house prices are exactly where they should be, given the constraints that exist in the property market. Keep in mind that: 

                  – We have a serious under-supply and construction problem.
                  – The tax benefits of investing in property (relative to other asset classes) are huge.
                  – Our aging population demographics means we need net-inward immigration.
                  – Unemployment is low, the government fiscal position is ok, and the banking sector is in pretty good shape while LVR's are in place. 

                  I don't see any of those things fundamentally shifting any time soon, to the extent they could precipitate a significant fall in house prices. 

                  • Pat

                    couple of points

                    Rural returns under threat especially given world trade position

                    Unemployment currently low….forecast to rise (see above)

                    Debt levels at absolute max even with near zero interest rates

                    The whole house of cards is waiting for the puff of wind, one thats likely to arrive from offshore and therefore outside the control of either the RBNZ or the Gov

                  • Blazer

                    The big factors are affordable land,RMA and interest rates.

                    The current ponzi scheme would falter if a Govt with balls addressed the first 2 issues.

                    This new 'normal' allows $1million homes @ 4% rates ,as opposed to  previously affordable'  $500,000 homes @ 8%.

                     

                    There is plenty of land in NZ.

                    Landbanking and 33,000 empty homes in Auckland alone are issues.

                    Nearly 2 decades of  foreign investment ,money laundering and using RE as a safe deposit vault ,along with immigration levels and a Parliament where the  average M.P owns 2-3 properties,plus 2.5 billion in accommodation supplements to bolster the so called open market and Kiwis have become tenants in their own country.

                     

                    • Phil

                      This new 'normal' allows $1million homes @ 4% rates ,as opposed to  previously affordable'  $500,000 homes @ 8%.

                      Nope.

                      When a bank tests an applicant's financial position for loan serviceability, they don't use the current interest rate. They use some kind of assessment rate that represents long-run average rates. I believe in NZ it's around 7-8% for most banks. 

                      That's because the bank, unsurprisingly, has an interest in you repaying the loan they agree to give you. 

        • Blazer 19.1.1.2

          They could live with it.

          Look at the current Westland Farmers deal embracing the Chinese,not to mention the vast investments in NZ property and business the Chinese currently have in NZ.

  19. Blazer 20

    ANZ are making empty threats,and doing themselves no favours by their recalcitrant behaviour.

  20. peterlepaysan 21

    Media idiots giving ANZ far too much oxygen.  Typical Australian bully loudmouthing in the playground.

    Ackshully some local reps need protection.

     

  21. Incognito 22

    So, ANZ is threatening to kill the goose that lays the golden eggs. Yeah, right! Nek minnit, they will burn down the money tree. What kind of infantile attitude is that from our largest bank? What happened to having wise men and women at the helm? What happened to the cool heads? Were they ever there even?

  22. Kevin 23

    Why don't they just write themselves a mortgage?

    Works for Joe Public.

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  • October 2019 – Newsletter
    https://mailchi.mp/7d9133add053/closing-the-gap-october-2019-newsletter ...
    Closing the GapBy Tracey Sharp
    2 weeks ago
  • And they wonder why we think they’re environmental vandals…
    The Zero Carbon Bill is due back from select committee in two weeks, and will likely pass its final stages in November. So naturally, farmers are planning a hate-march against it. But they're not just demanding lower methane targets so they can keep on destroying the planet; they're also demanding ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Climate Change: Paying the price in California
    Last year, California burned. This year, to stop it happening again (or rather, to stop themselves from being found liable if it happens again), Pacific Gas and Electric is cutting power to half the state for a week:Schools are closed. Traffic lights down. Tunnels dark. Businesses unopened. Hospitals running on ...
    No Right TurnBy Idiot/Savant
    2 weeks ago

  • Government invests in Te Reo, environmental data research
    The Government is investing in ambitious research that will digitise Te Reo, grow the low-carbon protein efficient aquaculture industry, help interpret environmental trends, and large data sets says Research, Science and Innovation Minister Megan Woods. The four projects range from teaching Siri to speak Te Reo to crunching large environmental ...
    BeehiveBy beehive.govt.nz
    4 hours ago
  • Government announces next steps as part of a comprehensive plan to fix skills gap
    A new education-to-employment brokerage service to strengthen connections between local employers and schools. Funding for more trades focused ‘speed-dating’ events to connect schools with employers. Promotional campaign to raise profile of vocational education. The Government is taking action to increase the number of young people taking up vocational education and ...
    BeehiveBy beehive.govt.nz
    6 hours ago
  • Corrections Amendment Bill passes third reading
    A Bill to improve prison security and ensure the fair, safe, and humane treatment of people in prison while upholding public safety has passed its third reading. Corrections Minister Kelvin Davis says the Corrections Amendment Bill makes a number of changes to ensure the Corrections Act 2004 is fit for ...
    BeehiveBy beehive.govt.nz
    20 hours ago
  • Ngāi Tahu CEO appointed to NZ-China Council
    Minister for Māori Development, Nanaia Mahuta, has selected Arihia Bennett MNZM, Chief Executive Officer of Te Rūnanga o Ngāi Tahu, as the Te Puni Kōkiri appointed representative on the New Zealand-China Council. The New Zealand-China Council (the Council) was established in 2012 as a New Zealand led and funded organisation ...
    BeehiveBy beehive.govt.nz
    23 hours ago
  • Southern Response claims move to EQC
    Responsibility for processing the small number of Southern Response claims still to be settled will be transferred to EQC by the end of the year. “As claim numbers reduce, it no longer makes sense for the Crown to have two organisations processing the remaining Canterbury claims,” Grant Robertson says. “Since ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Bowel screening starts in Whanganui
    Health Minister David Clark is encouraging Whanganui residents to take up the opportunity for free bowel screening, which can detect cancer early when it’s easier to treat.   Over the next two years 12,000 Whanganui locals, aged 60 to 74 will be invited to participate in the National Bowel Screening ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Pacific Peoples Minister to attend Our Ocean Conference in Norway
    Minister for Pacific Peoples Aupito William Sio, heads to Oslo today to represent New Zealand at the sixth Our Ocean Conference, which is being hosted by the Norwegian Government from the 23-24 October. “The Our Ocean Conference mobilises real action on issues like marine plastic pollution and the impacts of ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government announces 27 percent increase in Trades Academy places
    Two secondary-school initiatives are being expanded as part of the Government’s plan to see more young New Zealanders take up a trade to help close the skills gap.   This includes the largest single increase in Trades Academy places in recent years. Prime Minister Jacinda Ardern and Education Minister Chris ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Speech to the New Zealand Institute of International Affairs, Pacific Futures Conference: Connection...
    Session 4: Pacific Connectivity – Youth, Media and New Opportunities   Kia ora tatou katoa and Warm Pacific greetings to one and all. Representatives of Tainui, the local people of the land, or manawhenua – the indigenous peoples of this area – have welcomed you this morning in accordance with ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Methane reducing cattle feed one step closer
    The Government today announced its support for a project that could substantially reduce agricultural greenhouse gas emissions from cattle. The announcement was made as part of Prime Minister Jacinda Ardern’s and Agriculture Minister Damien O’Connor’s visit to Nelson’s Cawthron Aquaculture Park. The Cawthron Institute will receive $100,000 from the Government’s ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Bill to refresh superannuation system passes first reading
    Social Development Minister Carmel Sepuloni has welcomed the first reading of the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Bill. “Every New Zealander has a stake in New Zealand Superannuation and Veteran’s Pension,” says Carmel Sepuloni. “They are our most common form of social assistance – nearly 800,000 New ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Government announces next steps in fight against measles
    Babies in Auckland aged six months and over can receive a free vaccination and children will all have access to vaccines, Associate Minister of Health Julie Anne Genter announced today at Papatoetoe High School.   The move comes as part of Government efforts to step up the fight against measles. ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Speech to the New Zealand Institute of International Affairs, Pacific Futures: Connections, Identity...
    ***Check against delivery*** Good morning. It is a pleasure to be here, and to have the honour of opening this important conference on behalf of the New Zealand Institute of International Affairs. Let us take the opportunity to acknowledge all the people who have helped make today possible, including our special ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Police trial new response to high risk events
    Police Minister Stuart Nash says the safety of frontline officers and members of the public will be the focus of a new trial of specialist Police response teams in three of our largest urban centres. Police have this morning released details of an initiative to be trialled in Counties Manukau, ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New awards celebrate fisheries sustainability
    The Minister of Fisheries is calling for entries for a new public award to celebrate innovation in our seafood sector. “I have established the Seafood Sustainability Awards to recognise and celebrate those throughout industry, tangata whenua and communities who demonstrate outstanding dedication and innovation towards the sustainability of New Zealand’s ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • More progress for women and we can do more
    Minister for Women Julie Anne Genter welcomes leaders in the private sector taking action on closing their gender pay gaps to ensure a fairer workplace for all New Zealanders. Ms Genter today launched a new report, Addressing the gender pay gap and driving women’s representation in senior leadership, from the Champions for ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Proposals to curb environmental damage help our coasts and the oceans
    Government Ministers today welcomed the release of a marine environment report highlighting the four key issues affecting our oceans, estuaries and coastlines.  The release underlines the importance of government proposals to combat climate pollution, ensure clean freshwater, protect biodiversity, make land use more sustainable, and reduce waste and plastic.    Environment ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • New mental health facility for Waikato
    The Government has approved funding for a new acute mental health facility for Waikato which will provide better care and support to people with mental health and addiction issues. Prime Minister Jacinda Ardern and Health Minister Dr David Clark announced the $100 million project to replace the aging Henry Rongomau ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • 500 new te reo Māori champions in our classrooms
    The Government is making progress on its goal to integrate te reo Māori into education by 2025, with over 500 teachers and support staff already graduating from Te Ahu o te Reo Māori,  Associate Education Minister Kelvin Davis announced today. Kelvin Davis made the announcement at an awards ceremony in Waikanae today, for ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Minister James Shaw welcomes 2018 Census first release
    Statistics Minister James Shaw has welcomed the first release of 2018 Census data. The first release of data today, 23 September, includes key data on population, regional growth, the number of homes and the size of different ethnic groups in New Zealand. Data from the 2018 Census will support the ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Driving transparency, ethics and accountability in government use of algorithms
    Minister for Statistics James Shaw today announced a public consultation on a proposed algorithm charter for government agencies. The charter has been developed by the Government Chief Data Steward in response to growing calls for more transparency in government use of data. Computer algorithms – procedures or formulas for solving ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • New Zealand and the Netherlands working together on climate change
    Agriculture Minister Damien O’Connor, Climate Change Minister James Shaw and visiting Dutch Prime Minister Mark Rutte co-hosted a business roundtable in Auckland this morning focused on working together to address climate change.  “The Netherlands is an important partner for New Zealand. We share a strong agricultural history. Sustainable agribusiness and ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Protecting fairness for workers and businesses
    The Government is taking action to build an inclusive economy where more of us receive our fair share at work and businesses can compete on great products and services, not undercutting wages and conditions, Immigration and Workplace Relations and Safety Minister Iain Lees-Galloway says. Two consultations launched today seek feedback ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Indigenous Freshwater Fish Bill Passes
    The future for New Zealand’s threatened indigenous freshwater fish looks brighter with the passing of the Conservation (Indigenous Freshwater Fish) Amendment Bill in Parliament today said Minister of Conservation, Eugenie Sage. “Until now, our freshwater fish legislation has been 20 years out of date. We have lacked effective tools to ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Kiwis to take part in world’s biggest earthquake drill
    At 1.30pm tomorrow, hundreds of thousands of Kiwis will join about 65 million people around the globe in ShakeOut, the world’s biggest earthquake drill. The annual drill is to remind people of the right action to take during an earthquake which is to Drop, Cover, Hold, and to practise their ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Rising wages and low inflation supporting Kiwis
    Kiwis are benefiting from higher wage growth and low inflation under the Coalition Government. Stats NZ data out today shows the rise in the cost of living remains low, as annual Consumers Price Index (CPI) inflation fell to 1.5% in September from 1.7% in June. “The low inflation comes as ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • NZ economy strong amid global headwinds
    New Zealand’s economic strength and resilience has been recognised in a major update on the state of the global economy. The IMF’s latest World Economic Outlook released overnight shows a reduced global growth forecast over the next two years as issues like the US-China trade war and Brexit take hold. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Keeping New Zealanders safer with better counter-terrorism laws
    Justice Minister Andrew Little has today introduced a new Bill to prevent terrorism and support the de-radicalisation of New Zealanders returning from overseas. The Terrorism Suppression (Control Orders) Bill gives the New Zealand Police the ability to apply to the High Court to impose control orders on New Zealanders who ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Improved succession and dispute resolution core of Ture Whenua changes
    A Bill that proposes targeted changes to simplify the processes for Māori land owners when engaging with the Māori Land Court has had its First Reading today. “The approach taken by the Government is to ensure that the protection of Māori land remains a priority as we seek to improve ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Speech to CTU Biennial Conference
    Let me first thank all the new unionists and members in the room. There is nothing more important to improving people’s working lives than people making the decision to care, to get on board and help, to take up the reins and get involved. Congratulations to you. You bring the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Minister ensures continued Whenuapai flight operations
    Minister of Defence Ron Mark has signed a certificate exempting the activity of engine testing at Whenuapai Airbase from the Resource Management Act 1991. The Act gives the Minister of Defence the power to exempt activities for the purposes of national security.  The certificate will mean the recent Environment Court ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • NZ joins Coalition of Finance Ministers for Climate Action
    Finance Minister Grant Robertson has announced New Zealand will join the Coalition of Finance Ministers for Climate Action while attending APEC meetings in Chile. The objective of the 39 member Coalition is to share information and promote action to tackle climate change. It was formed in April this year, in ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Feedback Sought – Section 71 – Lyttelton Parking
    Feedback sought– Lyttelton commercial zone parking  The Associate Minister for Greater Christchurch Regeneration, Poto Williams, is seeking feedback on a proposal to remove on-site car parking requirements for new developments in the Lyttelton commercial zone.  The proposal, by Christchurch City Council, asks that powers under section 71 of the Greater ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Feedback Sought – Section 71 – Hagley Oval
    Hon Minister Poto Williams Associate Minister for Greater Christchurch Regeneration   MEDIA STATEMENT       Tuesday 15 October 2019 Feedback sought – Hagley Oval The Associate Minister for Greater Christchurch Regeneration, Poto Williams, is seeking feedback on a proposal about Hagley Oval. The proposal was developed by Regenerate Christchurch ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • CTU speech – DPM
    Ladies and gentlemen, NZCTU President Richard Wagstaff, members of respective unions – thank you for the invitation to speak to you today. This might be preaching to the choir, but the importance of trade unions in New Zealand’s historical arch is difficult to understate. And it is my belief that ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Police Association Annual Conference
    "Let’s start by acknowledging that it has been a huge year. " Police Association Annual Conference James Cook Grand Chancellor Hotel Wellington Nau mai, haere mai. Tēnā koutou, tēnā koutou, ka nui te mihi, ki a koutou katoa. President of the Police Association, Chris Cahill; Members of the Association and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand announces a further P-3 deployment in support of UN sanctions
    Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark have announced the New Zealand Government’s decision to again deploy a Royal New Zealand Air Force P-3K2 (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea. New ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand deeply concerned at developments in north-east Syria
    Foreign Affairs Minister Winston Peters says New Zealand continues to have serious concerns for peace and stability in north-east Syria. “Recent reports that hundreds of ISIS-affiliated families have fled from a camp are deeply concerning from a humanitarian and security perspective”, Mr Peters says. “While we acknowledge Turkey’s domestic security ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government on high alert for stink bugs
    Biosecurity Minister Damien O’Connor is warning travelling Kiwis to be vigilant as the high-season for the crop-eating brown marmorated stink bug (BMSB) is under way. “We’re on high alert to stop BMSB arriving in NZ. The high season runs until April 30 and we’ve strengthened our measures to stop stink ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Better protections for students in halls of residence
    The Government is moving swiftly to change the law to improve the welfare and pastoral care of students living in university halls of residence and other tertiary hostels. Cabinet has agreed to several changes, including creating a new mandatory Code of Practice that sets out the duty of pastoral care ...
    BeehiveBy beehive.govt.nz
    1 week ago