Bank Profits, Cheques and Balances

Fr Kevin Head SM

In Aotearoa New Zealand Westpac Bank made a profit of $583 million for the six months ended 31 March 2021. For the same period, BNZ made $660 million and ANZ, $930 million. Such gains are excessive. While their profits have skyrocketed, services provided by the banks to their ordinary customers have become fewer and fewer.

The banks’ ceasing to provide or deal with cheques makes life more difficult and stressful for many older people who do not have the necessary skills to use online banking or may not even own a computer. No longer being able to use cheques, they have no choice but to queue in a bank to pay their bills or draw money from an ATM to pay their accounts in cash.

Many branches which have made an insufficient profit from the banks’ point of view have been closed. The banks’ cessation of such services has disadvantaged not only the elderly but also those who live in smaller towns and lower socio-economic suburbs in our cities.

One suburb in South Auckland, with a population of 19,000 or so, now has only one bank – New Zealand-owned – while the others, overseas-owned, are a twenty-minute drive away in usually heavy traffic.

A further point about the banks' lack of service: all banks seem to be chronically understaffed. If you wish to deal with a person face-to-face behind the counter, it is not uncommon to queue for an hour or more.

The bottom line is that banks in New Zealand are greedy and proud of the profits they make for their shareholders, most of them overseas. The NZ-owned banks are probably no better. Kiwibank, for example, led the pack in doing away with payments by cheque at the end of February last year.

In the Consumer magazine 2020 annual bank survey of 2114 New Zealanders, aged 18 years and older,

• 70% agreed the profit banks are making shows they’re charging too much

• Only 48% agreed banks can be trusted

• Only 38% agreed banks, in general, have their customers' best interests at heart

• Only 36% agreed banks charge customers fairly and that competition keeps their charges competitive

• 73% agreed banks need to be monitored more closely to protect consumers from irresponsible practices.

The NZ-owned banks rated best in the survey. 90% of Taranaki Savings Bank customers were very satisfied with the services the bank provided, The Co-Operative Bank had a rating of 81%, and Kiwibank, 67%. The ratings for the five Australian-owned banks were: ASB, 60%, ANZ 58%, Westpac, 57% and BNZ 54%.

Banks are privileged to look after depositors’ money. While they need to make reasonable profits, they must balance profit against service provision to their customers. Changing one’s bank is a hassle. Perhaps the time has come, though, to shake the dust of the big banks from our feet and move to a locally-owned one, if there is a branch nearby.