Figure 1: Unlike other developed nations, NZ's household debt to disposable ratio is rising again (data from latest IMF report).

Collective bargaining is quickly approaching, and we need to establish with members what claims they would like to propose for bargaining.  You also will be aware that as an outcome of negotiations last year the Co-operative Bank and FIRST Union members agreed to a working group on pay parity. We  now have a proposal that came out of the working group, and members now need to vote on this.

Starting next month, bank workers will be forced to do more checks on customer identity and, in some cases, account activity, under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.

Banks will need to comply with the new law by June 30, and the NZ Bankers’ Association is asking people (both customers and bank employees) to co-operate with the changes.

The Reserve Bank have just released their May 2013 Financial Stability Report, with  Governor Graeme Wheeler claiming that while the  country’s financial health is still sound, rising house prices and private sector credit pose a concern.

Fidelity have increased their market share from fifth in the country to third by purchasing Tower’s life insurance business for $189 million (a combination of cash and capital release). The deal still requires regulatory approval but is expected to be finalised in the next few months.

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.

Analysts from UBS have warned that while Australia’s big banks were among the strongest in the world, that investors would be well-advised to be wary of them.

"The Aussie banks are very good companies. They are profitable, resilient, well capitalised, well managed, shareholder focused and have a very strong industry and regulatory structure," they said.

The FIRST Union bargaining team met with NZCU prior to Easter and were unable to reach a settlement, with NZCU claiming they needed time to review market data with regard to pay rates.

At that meeting FIRST Union took the position that the existing pay system was not working. NZCU agreed and has since reported that they are reviewing their pay system.

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.