BNZ's profits at high cost to NZ businesses, households

Near record profits announced by BNZ today comes at high cost to New Zealand businesses and households and reinforces the need for Government to focus on how it can reduce the costs to New Zealand of the foreign controlled banking sector, said Green Party Co-leader Dr Russel Norman today.

Dr Norman was responding to the near-record full-year profits posted by the Australian-owned Bank of New Zealand today, which announced a 21 percent increase in after-tax profits to a near record $741 million today.

"BNZ is the third of the four big Australian banks to post excessive profits this year - profits made at the expense of New Zealand businesses and households," said Dr Norman.

"Most of these profits will flow offshore and they constitute the single biggest income outflow in our current account deficit.

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

"The National Government's complacency over foreign ownership and the worsening current account deficit means the banks are free to strip-mine capital out of New Zealand.

"National says it is concerned about reducing costs to business, yet won't challenge the super-profits of the Aussie banks - super-profits which increase costs to Kiwi businesses. Cleaners are to have their employment rights reduced to cut business costs while the banks are left untouched."

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 four 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 additional 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 profiteering banks is to switch to New Zealand-owned banks, building societies, and credit unions."