Summary

Margins among New Zealand banks have remained relatively stable due to benign macroeconomic conditions. The average cost-to-income ratio has changed little year on year, down 1 percentage point to 52% in 2017. However, there remain large disparities in operating efficiencies within the market. The same is also true for profitability, with large disparities in return on asset figures. Growth in balances across credit cards, retail deposits, personal loans, and mortgages is expected to continue at approximately the same rate for 2018-22.

This report identifies macroeconomic and competitive dynamics that have affected the New Zealand retail banking market over the last year, and provides insight into -
- The outlook for deposits, credit cards, personal loans, and mortgages.
- Net changes in market share across all four product areas.
- Overall financial performance, including profitability, efficiency, and income sources.

Scope

- Term deposits grew by 14.7% in 2017 and non-bank consumer lending grew by 12%.
- The big four gained the largest share of the mortgage market in 2017, gaining on average 0.9%.
- Heartland Banks increased its percentage of loans distributed on marketplace lending platforms from 5% in 2016 to 10% in 2017.

Reasons to buy

- Identify factors affecting growth prospects across the deposit, credit card, personal loan, and mortgage markets.
- Track competitor gains and losses in market share.
- Assess the financial performance of competitors.

Companies Mentioned
ANZ
ASB
BNZ
Co-op Bank
Heartland Bank
HSBC
KiwiBank
SBS Bank
TSB Bank
Westpac