Simplicity's bank profit clock criticised as 'gimmicky'

Tuesday, 5 March 2019

Simplicity claims that Australian banks make too much money from New Zealanders.

A 'bank profit clock' designed to highlight the amount of money earnt by Australian-owned banks in New Zealand has been dismissed as 'gimmicky' by one commentator.

KiwiSaver provider Simplicity has launched the website, which breaks down the banks' most recent after-tax profits to a per-hour basis.

Managing director Sam Stubbs said it was in response to a run of record profits. He was particularly concerned at whether the Australian banks would pay for the poor behaviour in Australia highlighted by that country's Royal Commission of Inquiry into misconduct in the sector.

'We suspect they are going to try and milk New Zealand customers to pay for their parents' sins across the Tasman,' he said.

* ANZ makes almost $2b from New Zealand banking

Sam Stubbs: 'We suspect they are going to try and milk New Zealand customers to pay for their parents' sins across the Tasman.'

* Banks make more money out of Kiwis than Australia**

'The recent six-monthly profit announcement by ASB is a big yellow warning sign,' he said.

'ASB announced 6 per cent higher profits in NZ, while profits were 6 per cent lower for their parent company in Australia.'

The profit clock shows that Australian-owned banks in New Zealand - ANZ, ASB, BNZ and Westpac, made a combined after-tax profit of over $5.1 billion in NZ in the last financial year, equating to more than $580,000 an hour throughout the year, or $14 million a day.

ANZ's $1.9b profit was higher than Sky City's, Air New Zealand's, Fisher & Paykel Healthcare's, Auckland Airport's, Ryman's, Fonterra's and Spark's combined.

But Claire Matthews, a banking expert at Massey University, was sceptical about what the tool could achieve.

'It's gimmicky, and just fits the Simplicity approach of attacking the Aussie banks. I don't see that it has any constructive value.'

Economist Cameron Bagrie, however, said the tracker was putting sunlight on the profit issue in the same way the Reserve Bank was.

He said quoting after-tax profits could even be seen to minimise what banks were earning.

'Why do we always quote bank profits after tax? They are like everyone else and pay tax so what they are quoted as making should include the tax component.'

The NZ Bankers Association was approached for comment.