A self-employed Wellingtonian has described the struggle of working with her bank to get a mortgage holiday, as tough economic times continue to hit Kiwis.
Over the next two days, bank bosses are appearing before a Commerce Commission conference looking into competition and bank profits.
Many Kiwis are facing mortgage pain as the big Aussie banks continue to make steady profits and one business leader calls for the institutions to be reined in.
Self-employed project coordinator Helen McLeay told 1News about her experience attempting to work with a major bank.
With work drying up this year, she proactively called her bank to arrange a mortgage holiday in advance.
“I have found work but I’m currently earning half of what I was earning previously.”
She was then re-directed to her bank’s hardship team — despite making her payments on time with no debt — and approved for relief which she says doesn’t leave her better off.
“At the end of the three months, which finishes at the end of May, I’m now $5000 further in debt, and my fortnightly payments go up by $53 a fortnight, and I’m now earning significantly less than I was. I’m basically no further ahead.”
![The self-employed project coordinator told 1News about her experience attempting to work with a major bank on getting a mortgage holiday.](https://tvnz-1-news-prod.cdn.arcpublishing.com/resizer/v2/the-self-employed-project-coordinator-told-1news-about-her-e-6JVDE7HBCFHRLBI2ELBOADQ5QI.jpg?auth=2eb3e0958e976ef3f2d0112338574c35986c509ea7c392e3f4b9f98b076fd7be&quality=70&width=767&height=431&focal=960%2C540)
As part of their customer messaging, banks regularly ask mortgage holders and other staff to speak to them earlier rather than later for potential support.
In doing so, McLeay said she felt a lack of empathy from bank staff.
“They just follow scripts. There’s no ability for them to help you in a bespoke way. I also felt quite judged,” she said.
Mortgage pain and cost of living pressure for New Zealanders come as big banks continue to report stable half-year profits.
As a result, one high-profile business leader says banks ought to be feeling the pressure from the Government.
Business leader — ‘They are laughing all the way to the bank’
The managing director of KiwiSaver fund Simplicity, Sam Stubbs, said the big Aussie banks were ripping off New Zealanders. He has long been a critic of bank profits.
“The banks do low-risk mortgage lending, but they charge a very high margin,” he said.
“If you look at the OECD, New Zealand was the only country last year where the four most profitable companies were the big banks.”
![Sam Stubbs (file image).](https://tvnz-1-news-prod.cdn.arcpublishing.com/resizer/v2/kiwisaver-provider-says-labour-tax-proposal-was-stealth-weal-T3RIL6HYGRALPK4TNGWHX4UMMU.png?auth=03e33504ca6bf2dac1eda3325eebf4a8f6dcfa50ee85b86388c3e40174a5a29b&quality=70&width=767&height=431&focal=960%2C540)
He added: “They are laughing all the way to the bank. New Zealand has been a cash cow for Australian banks for a very long time. In my opinion, the biggest milking operation in this country is not Fonterra, it’s the Aussie banks.”
The big four retail banks — ANZ, Westpac, BNZ and ASB — are all local subsidiaries of large Australian banks. Stubbs said the Government should consider finding a way to beef up Kiwibank to become a “heavyweight” local player.
Profits are ‘middle of the road’ — boss of biggest bank
The boss of the country’s largest bank, ANZ, told 1News the bank was firmly of the belief that it was not extracting disproportionately more out of Kiwi customers.
Chief executive Antonia Watson said analysis commissioned by the bank suggested the profitability of the bank was “middle of the road” compared to others worldwide.
ANZ’s local subsidiary reported half-year net profits of over a billion dollars last week.
“In a New Zealand context, our profits are very high dollar-wise — $2 billion is a lot of money in anyone’s language. What people need to understand is the difference between profit and profitability,” she said.
![Antonia Watson (file image).](https://tvnz-1-news-prod.cdn.arcpublishing.com/resizer/v2/a-few-headwinds-ahead-for-nz-in-next-6-months-anz-chief-exec-7WIZPTOOBFFXPGIYC5P3OR4NWA.png?auth=d5573e87fc553bac4cad320bb6f33c011aad37ed2106300f77c28071fe88d1b7&quality=70&width=767&height=431&focal=960%2C540)
“So, what are the returns out of that profit to our shareholders? They’ve invested $17 billion into our bank — they need a return on that.
“Our independent report, which is out there on the Commerce Commission’s website, would say that the return that we make on that is middle of the road, just slightly below average, as we compare on a global scale of banks that look like us.”
Additionally, Watson said comparisons between Australian and New Zealand figures needed to be on an “apples-to-apples” basis.