Parliament’s Finance and Expenditure committee begins banking inquiry with questions for Antonia Watson, chief executive of ANZ New Zealand

ANZ chief executive Antonia Watson will be the first to face questions from Parliament’s Finance and Expenditure Committee (FEC) as it kicks off its banking inquiry at 9am.

Watson has already caught criticism from the Coalition Government after offering a lukewarm endorsement of a more comprehensive capital gains tax during a RNZ interview last month.

Finance Minister Nicola Willis has also criticized the big banks for being an uncompetitive “oligopoly” and has promised action after the Commerce Commission market study found competition was weak. 

Parliament’s banking inquiry was a requirement of the National-NZ First coalition agreement and will have a broader remit than the Commission, which focused on personal banking.

ANZ is New Zealand’s largest and oldest bank, with roots reaching back to 1840 when British-owned Union Bank of Australia set up a branch in Petone, Wellington for new settlers.

It acquired the National Bank of New Zealand in 2003 and merged it with the ANZ NZ brand in 2012. The bank had almost $195 billion in assets at the end of June 2024, compared with the other three big banks which had roughly $125 billion each.

The bank made a 70-page written submission to the FEC which argued it was not overly profitable and also that strong returns supported financial stability.

It also said the Commerce Commission had underestimated the level of competition in the sector but broadly supported its recommendations — such as reviewing the Reserve Bank’s prudential capital rules. 

Another big issue for the Parliamentary inquiry is rural banking. Members of the Primary Production committee will join the FEC for these hearings and are expected to get a turn grilling the CEOs. 

ANZ said in its submission that its agri banking segment provided the lowest returns out of all its lending divisions. Rural loans were more expensive than home loans but that didn’t mean the bank earned higher returns from them. 

When it acquired National Bank it became a key agriculture lender and now has almost $15 billion invested in the sector, largely with family-owned farming businesses.