Record ANZ profits stripping economy of capital

Record profits posted by ANZ bank today highlight the on-going weakness of having 94 percent of our banking industry owned offshore, said Green Party Co-leader Dr Russel Norman today.

Dr Norman was responding to the record full-year profits posted by ANZ New Zealand, which announced a 17 percent increase in after-tax profits to a record $1.265 billion today.

"The big four Australian banks are strip mining our national economy of capital," said Dr Norman.

"While the rest of New Zealand businesses are struggling in this weak economy, the banks are producing record profits.

"The dividend and interest payments the big four Australian banks pay offshore constitute the single biggest income outflow of our current account deficit.

"This capital out-flow is unsustainable and highlights the urgent need for greater local ownership of our banks.

"John Key's complacency over foreign ownership means he is unlikely to take our worsening current account deficit situation seriously."

The Green Party has proposed a number of solutions to address the lack of competition in the banking sector and the high degree of foreign ownership.

"Only one bank — Kiwibank — approaches anything like a suitable rival to the big four Australian banks, but it controls only 4 percent of New Zealand's total banking assets," Dr Norman said.

"A strong Kiwibank is an integral part of a smart, green economy.

"By injecting capital into Kiwibank and allowing it, in time, to become the Government's banker, we can increase its capacity to compete fairly with the much bigger Australian banks.

"Besides electing a new Government, the only thing New Zealanders can do about our dire banking situation is switch to New Zealand-owned banks, building societies, and credit unions.

Link to Parliamentary Research on bank profitability:
http://www.greens.org.nz/misc-documents/bank-and-industry-profit-comparison