Savers or investors in bank deposits rely in the stability and strength of the bank they choose.
In New Zealand, there is no deposit insurance.
But there is the Open Bank Resolution policy that could well apply a haircut to a saver's deposit, if their balance exceeds a to-be-decided minimum level.
Like all investments, there is risk involved with keeping funds in a bank.
And like all investors, you are wise to do some basic research on the comparative strengths of the institution you choose.
Until now, the only way you could do that investigation was by accessing the General Disclosure Statements of each bank. That is a dense, accounting-style document and you need to be comfortable reading financial reports if you are to make any sense of what is in there. Comparing various banks involves considerable work.
To help investors and depositors, the Reserve Bank has launched their Dashboard tool to allow 'easy' comparison. It is a significantly useful resource. We encourage anyone with assets exposed to any New Zealand bank to check out that tool.
It's key feature is that it allows easy comparisons between banks.
It also has very useful resources that explain in easy-to-understand ways what each of the metrics means.
And it is comprehensive.
But by being comprehensive, it too can look like another big data dump. There are adjustments allowing you to simplify the views, and using these features will help new readers get comfortable with the information provided.
Again, we encourage readers to check out the new RBNZ Dashboard.
In addition, interest.co.nz has also launched a new tool using the same data that powers the RBNZ one.
Ours takes a more spare approach, focusing on simple comparisons between three banks at once.
You can see our new tool here.
Our facility includes all the detail of the RBNZ one (we use the exact same data source), plus we will be including additional metrics and resources. Our additional data will include series like Dividends Paid, Leverage, CEO and other senior manager names, Board members, for example. That coverage will grow over time.
At this time, we only have data as at March 31, 2018. There are no backwards perspectives available and the RBNZ do not plan to provide them. The data released will grow quarterly, going forward.
And quarterly data may only be the only place where it is available when it is not a half-yearly or annual report. Banks have been relieved of their obligation to supply quarterly GDS's for "off quarters". That is ok in principle, but as not all banks use the same balance date, it makes comparison of some metrics more difficult for analysts like us. But much of the required data will be released in the Dashboard data. And it is being released earlier than the historical availability of the GDS's. Overall, there is a lot to like about the new system.
We will be making our Key Metrics Tool an integral part of our service. Soon you will be able to access it directly from out term deposit pages. It is already in our navigation and drop-down menus.
We welcome feedback below.
But this new way to assess banks will only be a success if many more people use tools like this to choose a bank, and then move to a safer, more stable bank if they are not satisfied with their existing one.
Those movements by customers "to safety", "to stability" will be the most important behavioural signal any bank could receive. Depositor power.
Time to check how your bank compares. Here.
11 Comments
Quarterly data is probably too granular to be useful frontrunning a bankrun. If you google "northern rock timeline" you see that volatility morphed into a bankrun in only 3 months.
Why did the RBNZ get rid of G1? This was arguably much better data providing a monthly the balance sheet for all the banks (thanks David). The OBR in my opinion virtually guarantees a bankrun at the slightest whiff of trouble. The cynic in me says that the only way to mitigate the risk is to relegate the public to mushroom status. Feed them S5&t and keep them in the dark. (edit) having said that in a grumpy mood without my morning coffee, the new RBNZ tool is very impressive! great data visualization.
a) G1 had never been monthly. It was always quarterly.
b) There are many more comparatives in the Dashboard than there ever was in the G1. As such it can give a far better view, far more nuanced.
c) The G1 was issued almost 90 days after the quarter end. The Dashboard is much more up-to-date, probably released 45 days or so after the quarter end.
d) if you want to keep the G1 going, you can easily do it yourself if you find it useful. All the data you will need is in the Dashboard, and very easy to access. Our own Bank Metrics tool may be an even easier way to access the data.
e) to say "The OBR in my opinion virtually guarantees a bankrun at the slightest whiff of trouble." is just silly. As a group, the weakest banks in New Zealand (see our Leverage review) are the NZ owned ones, and by a long shot. Kiwibank has had a recent severe drop in profits (shareholder returns have nearly evaporated. Heck, even Heartland Bank profits are larger and they are almost too small to make our reviews) = whiff of trouble. And yet there is no sign of a run. As there shouldn't be. What you say is just a cheap online smear.
f) what the heck has a UK incorporated bank got to go with anything in NZ? - especially one that was chaired by an entitled but ignorant british peer. As Governor Orr is reminding the Aussies, this is New Zealand. Apparently others need to hear the message too. NZ hasn't been little england for generations now. Hope you have noticed.
Oh your're right G1 was quarterly, I'm sorry I was looking at the wrong spreadsheet. Just mentioning Northern rock as an illustration that things can happen very quickly and quarterly data isn't that useful. Is it declining profit or declining equity that kills a bank.
Just how does the RB intend to inform 'the man in the street' about its Dashboard? Will they undertake a sustained publicity campaign and explain in detail what the different metrics mean?
Without that,it looks to me like a figleaf,but perhaps I am being over cynical.
echoed my thoughts, is this simple enough for joe public, can they see the main point how safe is my money.
sorry looks like a fail to me
but then if they did make it so joe public really knew the risk would that led to new practices of not putting your money in banks but hiding it in the ceiling etc.
my take is only the financial literate will use
Great point around publicity.
I've not seen it mentioned on MSM (the Herald had an article to say it was coming, but no apparent update), and it's a prominent, but easily missed link on their website.
Googling "Reserve Bank Dashboard" doesn't take you to it, and my wife hadn't heard about it.
Pretty lacklustre effort on that front, which is a shame, as the tool is terrific.
On an RBNZ publicity campaign, they do plan one - https://www.interest.co.nz/personal-finance/92301/rbnz-says-its-dashboard-allowing-depositors-compare-financial-information
Banks water down their liability over internet based loss by consumers?
https://www.stuff.co.nz/business/industries/104374598/banking-ombudsman…
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