The Report of the Finance & Expenditure Committee on the Reserve Bank’s Monetary Policy Statement for December 2012 is now public and contains the following gem on bank profitability late in 2012 (from page 9):
Recent data released by the Reserve Bank updated information it had provided to us in November about New Zealand banks’ profitability compared with those in other OECD countries. The new figures indicate that the profitability of Australasian banks is in the upper range for banks in advanced countries, rather than the mid-to-lower bracket as the governor had indicated at our earlier meeting…Some of us find it a matter for deep concern that the Reserve Bank’s data places Australasian banks as the fourth most profitable in the OECD on the basis of their returns on assets, and that data from the Bank for International Settlements suggests Australasian banks were actually the most profitable in the world in 2011.
So there it is; our foreign-owned banks are doing very nicely while the rest of New Zealand’s businesses are struggling to get by.
Expect to hear more from us on this in the New Year.