Second Inquiry on New Zealand Banking Competition Announced
(10 June 2024 – New Zealand) The New Zealand Government has announced a parliamentary enquiry into competition in the rural banking sector, following the release of a study on personal banking by the Commerce Commission last year.
The inquiry follows a March release of a draft report on personal banking by New Zealand’s competition watchdog which was focused on personal transaction accounts and home loans, which included stark findings of a narrow focus on profit leading to underinvestment in technology and low levels of innovation.
New Zealand’s Agricultural lending sector is dominated by the Australian owned ‘Big Four’ banks and Rabobank, who have a cumulative market share of 98.7 percent as of 31 March 2024, according to Reserve Bank of New Zealand data.
Parliament’s Finance and Expenditure committee, along with the Primary committee, will be leading the inquiry which will focus on better understanding the dynamics of competition within the sector and make strategic recommendations to provide better outcomes for New Zealand Farmers.
"Growing the rural economy is critical to rebuilding New Zealand's economy and with farmers' satisfaction with banking services dropping in recent years, it's critical we better understand the role of bank competition in that sector," commented Finance Minister Nicola Willis.
Aidan Gent, General Manager of Rural Banking at ASB added “We really encourage this committee to think about how this could potentially be an inquiry for good. This platform needs to be used to set up New Zealand food and fibre for success”, and suggested that the inquiry should not be too narrowly focused on capital regulations and interest rates, with the former being set by the Reserve Bank.
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