Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.


Mad Scientist
19108 posts

Uber Geek
+1 received by user: 2484

Trusted
Lifetime subscriber

Topic # 87843 8-Aug-2011 19:50
Send private message

Yes i do have something against banks. OCR is 2.5% and they charge around just under 6%, seemingly making an immediate 3%+ profit (look, if you think it's tiddly winks the Reserve bank thought about $10+ billion of our mortgages were on the floating rate) ...

recently ASB raised some of their fixed rates to get even more profit ... and it appears they are trying to save face now
http://www.stuff.co.nz/business/money/5409908/ASB-cuts-fixed-interest-rates
  




Swype on iOS is detrimental to accurate typing. Apologies in advance.


View this topic in a long page with up to 500 replies per page Create new topic
 1 | 2


Mad Scientist
19108 posts

Uber Geek
+1 received by user: 2484

Trusted
Lifetime subscriber

  Reply # 503522 8-Aug-2011 19:52
Send private message




Swype on iOS is detrimental to accurate typing. Apologies in advance.




Mad Scientist
19108 posts

Uber Geek
+1 received by user: 2484

Trusted
Lifetime subscriber

  Reply # 503523 8-Aug-2011 19:52
Send private message

not sure about petroleum as not sure who eats our $$$, apparently not the pump stations




Swype on iOS is detrimental to accurate typing. Apologies in advance.


1029 posts

Uber Geek
+1 received by user: 74

Subscriber

  Reply # 503530 8-Aug-2011 20:03
Send private message

Not sure I think that banks are bad, but I believe that they probably make monopoly profits, based on switching costs for consumers.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10742977

this article seems to back that up in terms of profit size, $2.3 billion in 6 months...

Jon

453 posts

Ultimate Geek
+1 received by user: 27


  Reply # 503534 8-Aug-2011 20:19
Send private message

As banks don't borrow off of the government, it can only influence what banks actually make on a home loan.

The OCR is a measure that the government charges banks for guaranteeing interbank transfers overnight.

Further reading on the OCR http://www.rbnz.govt.nz/monpol/about/0072140.html
More on bank lending margins http://www.rbnz.govt.nz/monpol/3683652.pdf

1809 posts

Uber Geek
+1 received by user: 649

Trusted
Subscriber

  Reply # 503538 8-Aug-2011 20:22
Send private message

It's a bit of a trick question really - all businesses are greedy. The purpose of a company is to return profits to it's shareholders, nothing more or less.

I've never worked anywhere where they have complained of making too much of a return, quite the opposite.

8027 posts

Uber Geek
+1 received by user: 387

Trusted
Subscriber

  Reply # 503625 9-Aug-2011 00:01
Send private message

joker97: Yes i do have something against banks. OCR is 2.5%  


The OCR is only one factor in the floating and very short term rates.

The cost for the banks of sourcing money from overseas is a far bigger factor.

Before the GFC the banks were typically making a profit margin on their mortgage interest rates of 0.9% after the GFC they started playing safer and doubled their margin to 1.8% ish.

Banks need to be 100% safe and reliable, so yes they are somewhat greedy.



Mad Scientist
19108 posts

Uber Geek
+1 received by user: 2484

Trusted
Lifetime subscriber

  Reply # 503627 9-Aug-2011 00:40
Send private message

darn! markovnikov rules again!




Swype on iOS is detrimental to accurate typing. Apologies in advance.


1366 posts

Uber Geek
+1 received by user: 16


  Reply # 503638 9-Aug-2011 06:05
Send private message

Ragnor: Banks need to be 100% safe and reliable, so yes they are somewhat greedy.


Even with them being greedy they have proven they are not safe or reliable requiring bailouts from the government to keep those bonuses flowing.

453 posts

Ultimate Geek
+1 received by user: 27


  Reply # 503663 9-Aug-2011 08:19
Send private message


Even with them being greedy they have proven they are not safe or reliable requiring bailouts from the government to keep those bonuses flowing.


This may be true of the major offshore banks but I think you'll find that the Aus/NZ banks have not had bailouts and have played it remarkably safe even before the GFC. Its because of this conservative outlook that we have had a better cushioning from the effects of the GFC than say Ireland where the banks were involved in the same weird financial transactions of those in the US.

Now I'm not saying that the banks here are saints and couldn't do better. Alan Bollard pointed out yesterday in a speech that lack of any real competition (Kiwibank hasn't made it to this level yet) may be costing us, and that over the time period 2002 - 2007 the average return on equity was the second highest in the OECD. Realistically though, this needs to be looked at over a longer time period to work out if is actually the case.

871 posts

Ultimate Geek
+1 received by user: 54

Subscriber

  Reply # 504522 10-Aug-2011 16:53
Send private message

Byrned:

Even with them being greedy they have proven they are not safe or reliable requiring bailouts from the government to keep those bonuses flowing.


This may be true of the major offshore banks but I think you'll find that the Aus/NZ banks have not had bailouts and have played it remarkably safe even before the GFC. Its because of this conservative outlook that we have had a better cushioning from the effects of the GFC than say Ireland where the banks were involved in the same weird financial transactions of those in the US.

Now I'm not saying that the banks here are saints and couldn't do better. Alan Bollard pointed out yesterday in a speech that lack of any real competition (Kiwibank hasn't made it to this level yet) may be costing us, and that over the time period 2002 - 2007 the average return on equity was the second highest in the OECD. Realistically though, this needs to be looked at over a longer time period to work out if is actually the case.


Well that depends on how far back in history.  Immediately crisis? no.  But BNZ needed a bailout in 1990 for example.

653 posts

Ultimate Geek
+1 received by user: 126


  Reply # 504609 10-Aug-2011 19:44
Send private message

Pretty sure no bank sources their funds at 2.5%... Commercial lending keeps getting more expensive too.

14408 posts

Uber Geek
+1 received by user: 1885


  Reply # 504634 10-Aug-2011 20:26
Send private message

joker97: Yes i do have something against banks. OCR is 2.5% and they charge around just under 6%, seemingly making an immediate 3%+ profit (look, if you think it's tiddly winks the Reserve bank thought about $10+ billion of our mortgages were on the floating rate) ...

recently ASB raised?some of their fixed rates to get even more profit ... and it appears they are trying to save face now
http://www.stuff.co.nz/business/money/5409908/ASB-cuts-fixed-interest-rates
??


It is not that simple and you should look at what they are paying depositors on call, rather than what the OCR is. They also have to build in risks and factor what they expect rates to be in the future. The fact is that rates will go up, as they are currently artificially very low due to the economy and EQ.

But we have been lucky that our banks have been so strong, and have been making a lot of money, otherwise we may have had banks fail in 2007-8

8027 posts

Uber Geek
+1 received by user: 387

Trusted
Subscriber

  Reply # 504641 10-Aug-2011 20:37
Send private message

jbard:
Ragnor: Banks need to be 100% safe and reliable, so yes they are somewhat greedy.


Even with them being greedy they have proven they are not safe or reliable requiring bailouts from the government to keep those bonuses flowing.


I was referring to the banks that operate in NZ.

1332 posts

Uber Geek
+1 received by user: 152
Inactive user


  Reply # 504643 10-Aug-2011 20:41
Send private message

Yes, commercial banks exist to make money. Shall we move along to the next moan about things you can't change?

8027 posts

Uber Geek
+1 received by user: 387

Trusted
Subscriber

  Reply # 504674 10-Aug-2011 21:39
Send private message

Given there are 9 major banks and a whole bunch of building societies, credit unions etc and NZ has only 1.6 million households... seems there is a decent level of competition.


 1 | 2
View this topic in a long page with up to 500 replies per page Create new topic

Twitter »

Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:



Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.