New Zealand's big banks reported multi-million dollar annual profits last week, but a banking expert says returns probably are not high enough to justify more investment.
New Zealand's biggest bank, ANZ New Zealand, made $1.1 billion in the year to September, an increase of 25% compared with the previous year.
That impressive lift in profit was mirrored by Westpac, which reported annual cash earnings jumped by 41% to $454 million, while BNZ's full year cash earnings rose by 19% to $612 million.
Some organisations have lambasted the banks for not passing some of the huge profits they are making to their workers, or lamenting that the profits are being siphoned across the Tasman to banks' Australian owners.
Massey University Centre of Banking Studies director David Tripe says while the banks are profitable, the return on assets is still less than the benchmark 1%.
He says profitability is at lower levels than would be sustainable in the long-run. He would expect Sydney and Melbourne bank executives to be saying that further investment in New Zealand cannot be justified on current returns.
