Commonwealth Bank of Australia CEO Ralph Norris told analysts at CBA's results briefing yesterday that ASB's mortgage margin had tightened in a competitive market influenced by an aggressive Kiwibank, but that the market would return to some type of 'rationality' over time.
"There's no doubt in New Zealand there's been significantly greater (competitive) pressure in relation to mortgages," Norris said, referring to Kiwibank's aggressive activity in the market. He had been asked about the slide in net interest margins in New Zealand.
"I would suspect that going forward I don't think we'll see a continuation of that sort of decline," Norris said, citing the amount of lending New Zealand still had to do on more expensive international markets to finance its current account deficit.
"There will be a more rational approach to pricing over time in that market and I hope it's sooner rather than later," he said.
* This article was first published yesterday in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.