When ANZ announced its record full-year profit of more than $2.5 billion, chief executive Antonia Watson said it was a good sign for New Zealand.
She said banks were a reflection of the economies they operated in, and the result showed New Zealand was turning a corner.
Westpac also reported a profit increase of 13%.
“It has taken New Zealand longer than hoped to recover from the post-Covid rebalancing, but there are now signs the nation’s economy is finally picking up,” Watson said.
But is that really the case?
Lyle McNee, portfolio manager and co-founder at saving fund provider Wedge, said it was disingenuous and “actually really insulting to all those people who have been struggling under the weight of such a weak economy this past year”.
“Of course, these profits don’t signal a stronger economy. They highlight just how bad New Zealanders are being treated by their banks – especially in terms of how little interest they received on their deposits.”
He said the net interest margin – the difference between what banks pay for deposits and charge for lending – was 2.6% for ANZ in New Zealand compared to 1.83% in Australia.
Robert MacCulloch, professor of economics at the University of Auckland, said he “thought it was a comms lie”.
Simplicity chief economist Shamubeel Eaqub expressed a similar sentiment.
“If you look at where the profit growth has come from, it’s all from personal, not from business and agriculture at all…
“Banks are not a leading indicator of the economy. They win when the economy goes up, they win when the economy goes down… where they’re making the profits is on the personal side of things because we’re not going to not pay our mortgages, right?
“It’s not surprising.”
Eaqub said the economy was improving but not in terms of profits yet. “It’s kind of the sequence of events. First you get customers coming back. You have the early part of the recovery to be high cost because people aren’t making decisions as fast yet so you have to rejig your business to deal with this recovery. Then you’re able to manage your costs and manage your prices and get profits.
“So, we tend to find profits lag the economic cycle versus the sales improvement, then the jobs improvement, then the profit improvements.”
Infometrics chief forecaster Gareth Kiernan said he was not convinced, either.
“There are small signs the economy may be staring to run around including some job and labour market data but they are still very small at this stage.
“The housing market – not that I want that to go picking up rapidly – the housing market is still very soft as well.”
Massey University banking expert Claire Matthews said she struggled with that interpretation, too.
“The ANZ profit is for the 12 months to September 30, 2025 – are they honestly arguing that 12-month period represented an improving NZ economy? No one else seems to be suggesting that. I’ve seen very recent comment that the NZ economy might now be picking up, but that would not be reflected in bank results until at least the half-year results to March 31, 2026.”
ANZ said lending to small business customers in its business and agri segment grew at more than double the market rate, and agri lending also grew more than the market. It said farm savings lifted 17%.
“Overall, ANZ business lending is up 2.3% over year to $25.5 billion driven by increased lending to small and medium business customers. Growth in lending to larger institutional and corporate customers was more muted.”
rnz.co.nz
