On Sunday, TSB revived its price match offer, aimed at matching any rate offered by the big four banks. The offer previously ran from mid February to March 3, but will now run until the end of this month.
TSB's offer is a calculated move to take customers from the big four lenders. It promises to match any rate offered by the big four. The previous incarnation of the offer matched one year rates only.
TSB CEO Donna Cooper (pictured) took aim at the Australian banks in a statement, and said "many Kiwis aren't comfortable with more than $5 billion in combined profit from Australian-owned banks leaving our shores."
Copper added: “At TSB we feel the same. We genuinely care about what’s best for New Zealand and the more profit we keep revolving through our local economy, the better outcomes for our country and people."
Meanwhile, state-backed lender Kiwibank continues to slash rates in an effort to grow its mortgage book. The bank has slashed its two year fixed rate special from 4.19% to 3.99%. The cut below the symbolic 4% mark sees Kiwibank's two year deal become one of the cheapest in the market, matching HSBC Premier. HSBC's Special rate at 3.95% is the cheapest on the market, but is limited to a small pool of customers.
The challenge from smaller lenders comes as the Reserve Bank of New Zealand plots new capital rules to "level the playing field" between the big four and its rivals. RBNZ proposals are set to force the big four to hold more capital in reserve. Historically, they have held a smaller proportion than their rivals, according to the Reserve Bank.