Banks earn about $610 profit for each person in NZ

Thursday 6 May 2004

Last year registered banks in New Zealand made about $610 profit from every man, woman, and child in the country - thanks in part to the real estate boom.

By The Landlord

KPMG's financial institutions performance survey for 2003 found that registered banks posted a collective net profit after tax of $2.45 billion, compared with $2.74 billion in 2002...

Mr Dinsdale noted that lending in the registered bank sector increased by $9.7 billion, or nearly 14 per cent.

"Lending for mortgages over residential property still dominates our analysis of lending," Mr Dinsdale said.

"At 51 per cent of total lending, it is up from 49 per cent in 2002 and consistent with the continuing boom in the real estate market," he said in a statement.

Real Estate Institute of New Zealand figures showed median house prices increased 19 per cent to $240,500 in the 12 months to March 2004.

The property boom - fuelled by low mortgage interest rates and strong net migration - had flattened in early 2004.

"In spite of the fact that rising prices are making first home purchases more difficult, it would appear from the lending statistics that the great Kiwi tradition of owning you own house continues unchecked," Mr Dinsdale said.

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