25 Sep 2014

Banking is highly competitive - KPMG

2:25 pm on 25 September 2014

KPMG insists New Zealand's banking industry is highly competitive, even though banks' profit margins swelled in the June quarter.

The accounting firm's analysis showed profit margins, excluding the ANZ Bank, rose a significant 7 basis points to 2.29 percent, in the three months ended June, compared with the March quarter.

KPMG said profits across the banking sector have risen more than 6 percent, to more than $1.1 billion, between the quarters, driven by lending and asset growth as-well-as improvements in margins.

KPMG's head of financial services John Kensington said the lending market was very competitive.

"Believe me it's still very competitive on the lending side, but what has helped the banks in this quarter in particular has been that global funding markets have loosened up again and funding is available offshore at relatively attractive rates.

"So there is still pressure on them being able to increase the rates that they lend to people at an awful lot, it's still very competitive on that side."

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