The first half of the financial year has been very good to “Big Four” Australian-owned banks, which have turned in collective cash profits of $1.8 billion in the first half of the financial year. That equates to around $400 for every man, woman and child in New Zealand.
Australia’s second largest bank (which owns the NZ Westpac) unveiled a special 10 cents-a-share dividend payout after posting first-half cash earnings of $NZD4.22 billion.
Michael Bennet, Banking correspondent for the Australian, reported that the high earnings were driven by, “cost-cutting, lower bad debts and a margin boost from holding back some of the official rate cuts from homeowners.”
ANZ was the first major NZ bank to post its half-yearly profit statements, recording before-tax profits of $692 million in the half year to 31 March, up 19% from $578 million on the same period last year.
However despite these profits, net interests income – the difference between what a bank earns from lending out versus how much it pays on deposits – was down four person.
Bank profits were in the spotlight again this week, with the KPMG quarterly analysis showing reported profits rising by 10.5% to $585 million in the December 2012 quarter.
A surge in net profit by the country's main retail banks late last year was made on the back of challenging staff conditions, bank worker union FIRST claims.
The bank workers’ union says that while no one is arguing banks shouldn’t be making a profit, the extent of the windfall of the four Australian banks off the back of New Zealanders would sit uneasily for many.
First Union's finance sector secretary, Andrew Casidy, said executive pay at the banks was ridiculous and clearly "out of sync with the vast majority of workers".
Finance Secretary for the FIRST Union Andrew Casidy says simply saying that banks aren't making the profits they made before the financial crisis isn't saying much.
