KPMG: Small banks growing loan books at quicker rate

In its latest Financial Institutions Performance Survey (FIPS), KPMG says the country’s non-major banks, such as The Co-operative Bank and TSB, grew their loan books from between roughly 2%-3.2%.

Among the non-major lenders, TSB saw the highest increase in lending. TSB’s loan book grew by 3.21% in the three months to December. At the lower end of the scale, SBS grew its loan book by 2.07%.

KPMG says New Zealand’s major banks “displayed low loan book growth rates” over the quarter. Kiwibank’s loan book grew by 0.96%, while at the lower end of the scale, ANZ’s book grew by just 0.36%.

ANZ retained the biggest slice of the New Zealand loan market with 31.32%, a slight drop of 17bps from the prior quarter. ASB remained in second with 20.86%, and BNZ third at 20%.

According to RBNZ statistics, housing loans accounted for 56% of total loans in the three months to December, a figure consistent with the prior quarter.

KPMG’s quarterly study found the New Zealand banking industry continued to grow its net profit after tax in the three months to December, albeit at a significantly slower rate than the three months to September.

The banking sector’s net profit after tax rose by just 1.56% in the three months to December. KPMG says the “sedate” increase, to $1.4bn, reflected a “slowing of the economy in the uncertain period post the election”. NPAT rose by 15.98% in the three months to September.

The KPMG survey also assesses the chances of new “challenger” banks emerging in New Zealand, following trends in other major markets such as the UK. KPMG says tech companies and new market entrants would “continue to examine how to disrupt” incumbents.

KPMG says the "oligopoly" in New Zealand differs to markets like the UK. The firm says New Zealand’s P2P lenders, and non-bank lenders in niche markets such as vehicle leasing, “may fall into the challenger bank bill”.