The big four Australian-owned banks in New Zealand. Photo: RNZ
A Commerce Commission inquiry into the profits of the New Zealand banking industry is expected to do little, if anything, to shake the dominance of the big four Australian-owned banks.
Global ratings agency S&P said the structure of the banking industry was expected to remain stable and dominated by the ANZ Bank, BNZ, ASB and Westpac banks.
Bank profits supported the stability of the country's financial system through retained capital, which would continue to build over the next few years, said the agency.
S&P director and report author Lisa Barrett said any initiatives introduced by the commission would not materially affect the big four banks, either in terms of their more than 87 percent market share or their profitability.
However, she said it could make some difference at the margins, which could allow smaller banks to compete more effectively.
"We expect New Zealand's four major banks to continue to dominate the banking industry regardless of any initiatives stemming from the Commerce Commission inquiry," Barret said in the report, referring to the commission's 14-month study into competition in personal banking services, announced in June this year.
The commission proposed to focus its study on banks' deposit accounts and home loans, including competition for these products, barriers to entry, the ease of switching providers, innovation in personal banking, and the profitability of New Zealand banks.
"The major banks are well positioned to sustain their superiority," Barrett said.
"This is despite the subdued operating and lending environment, which nevertheless remains competitive, particularly around mortgage pricing."
The feedback period on commission's preliminary issues report closes 7 September, 2023.