Global trade war 'bad news for NZ'
A global trade war beckons, which is bad news for a small open economy like New Zealand, warns Mark Smith ASB senior economist.
In a statement the New Zealand Banking Association says its members understand their importance as part of the fabric of regional New Zealand.
As a result, the five major banks - ANZ, ASB, BNZ, Kiwibank, and Westpac- will extend their current commitment not to close regional branches for the next three years, as part of the conclusion of the regional banking hubs trial.
In a tweet this morning Federated Farmers said it was “good to see banks responding to our banking inquiry advocacy”.
“Now we just need Adrian Orr to scrap his strictest capital requirements in the world,” Feds say.
Work on the regional banking hubs trial began in September 2019, with phase two launching in July last year. The trial finishes on 31 July this year. For almost all of this period, the participating banks have agreed to not close regional branches, says NZBA chief executive Roger Beaumont.
Rural Women New Zealand (RWNZ) has led the charge against regional bank branch closures.
RWNZ claims the closure of physical branches in rural communities has impacted and even discouraged customers’ service switching behaviours.
In a recent submission to the Commerce Commission, it said access to face-to-face services is an important criterion in comparing service options and potentially for consumers in selecting a transaction account that best meets their needs.
Beaumont says the phase two hubs were welcomed by their communities. However, the trial did not indicate a significant demand for these physical services with hub usage lower than many comparable regional branches or ATMs.
“NZBA and the participating banks put a huge amount of work into developing the hubs trial. We are proud of what we delivered, and most of the hub network will remain,” says Beaumont.
“It showed there is real community support for regional banking. However, it also showed that, even with almost all banking services provided, the customer use for a multi-bank hub is lower than many single-brand bank branches.
“For those reasons, we believe regional New Zealand is better off if banks maintain their current branch networks for three years, instead of closing regional branches and replacing some of those branches with an alternative, such as hubs.”
The branch closure commitment remains the same as is currently in place and will apply to regions outside the council boundaries of the six major metropolitan areas of Auckland, Hamilton, Tauranga, Wellington, Christchurch and Dunedin. It will not apply to Kiwibank agencies or cases where a branch needs to be closed due to earthquake strengthening, health and safety, or lease expiry.
The commitment covers the existing hubs, apart from Stoke and Opunake. The Stoke hub will not continue after the trial as a permanent arrangement would require a disruptive refurbishment. The Opunake hub will also end as it has been agreed with the hub host to discontinue the hub site for all services as the primary usage only relates to the ATM. In both cases it is intended that a hubs multi-bank deposit Smart ATM (the most used part of hubs) will remain.
