Aussie banks planning to pass on costs to customers if reserve bank changes push through, Shane Jones warns

After meeting with ANZ bank chief executive Shayne Elliott in Melbourne last week, Regional Economic Development Minister Shane Jones has “not got a sliver of doubt” in his mind that banks would look to pass on costs to customers if the Reserve Bank’s proposed capital requirements come into effect.

The Reserve Bank has proposed to make New Zealand banks increase capital over five years. There have been veiled threats by Australian-owned banks that such reforms will cause them to downscale services in the country, hitting regional branches the hardest, but Minister Jones said he did not see “a wholesale withdrawal of services”.

“We both agreed that there has to be more innovation and opportunity for the banks to collaborate and generate solutions for regional New Zealand,” the Minister said about his conversation with Mr. Elliott.

He also said that it “will do inordinate damage to the brand and the social license of ANZ Bank” if the Australian multination does withdraw services from our regions, saying that "if [ANZ] want to maintain their social license, you can’t send vast swathes of the agri-business sector in rural New Zealand to the wall".

However, Minister Jones does not believe ANZ bank will take in the added expenses to their company as a result of the Reserve Bank’s changes.

"Let me absolutely be clear about this – after the meeting with Shayne Elliott, the ANZ CEO, I’ve not got a sliver of doubt in my mind that they are not going to absorb these costs; they are going to look to pass them on,” he warned.

“If those capital requirements go through, my interpretation of Mr Elliott is that they will significantly change their model of operation in New Zealand."

While being “unhappy” about the possibility of added costs passed on to New Zealanders, Minister Jones accepts that this matter is “is between the governor of our Reserve Bank and [ANZ]”, and instead called for a constructive discussion to take place.

 

https://www.tvnz.co.nz/one-news/new-zealand/banks-would-look-pass-costs-customers-if-capital-requirements-enacted-shane-jones

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