Losing interest: The declining cash rate has caused industry revenue to decline

The Banking industry has declined slightly over the past five years due to an overall drop in the cash rate. However, the rapid rise in residential housing prices and a strong property market over the same period have boosted the value of industry assets and propped up the industry. Concerns surrounding an overheated residential property market have been slightly tempered with the Reserve Bank of New Zealand introducing loan-to-value ratio (LVR) restrictions on mortgage lending. Overall, industry revenue is expected to decline at an annualised 0.1% over the five years through 2017-18.Fluctuations in the cash rate have been a key determinant of the industry's performance over the past five years...read more.

Industry Statistics & Market Size
Annual Growth 13-18
Forecast Growth 18-23

Industry Threats & Opportunities

  • Rising house prices have increased the value of mortgages issued by banks
  • Industry Report - Industry SWOT Analysis Chapter

    The Banking industry is in the mature phase of its economic life cycle. The declining number of establishments is indicative of a mature industry, despite the number of enterprises rising slightly. Operations are becoming more centralised with the proliferation of online banking, which has reduced the need for an extensive physical presence. The landscape of the industry is also well-established with the four major banks accounting for nearly 80% of revenue. While new products continue to be introduced, the core concepts of providing deposit accounts and lending services remain.Industry value added, which measures an industry's contribution to the overall economy, is forecast to rise at an annualised 3.5% over the 10 years through 2022-23. Thi...purchase to read more.

    Additional Insights for the Banking Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Banking Industry are

  • Access to the latest available and most efficient technologies
  • Superior financial management and debt management
  • Having a good reputation
  • IBISWorld analysts also discuss how external factors such as Cash rate and Residential housing loan rates in the Banking industry impact industry performance..

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    What's in this report

    What is the Banking in New Zealand Industry?

    Industry enterprises primarily operate banks. Industry activities include accepting deposits and issuing consumer and commercial loans.

    Industry Products
  • Housing loans
  • Business, personal and credit card loans
  • Core banking services
  • Industry Activities
  • Development bank operations
  • Savings bank operations
  • Trading bank operations
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Cash rate
  • Residential housing loan rates
  • Residential housing prices
  • Total capital expenditure

  • Current Performance
  • Industry structure
  • Funding costs
  • Housing market
  • Dairy sector
  • Chart: Revenue Growth

  • Industry Outlook
  • Residential housing
  • Regulation
  • Technology
  • Table: Banking Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Banking Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Construction in New Zealand
  • Agribusiness in New Zealand

  • Key Selling Industries
  • Accounting Services in New Zealand
  • Legal Services in New Zealand

  • Products & Services
  • Housing loans
  • Business, personal and credit card loans
  • Core banking services
  • Chart: Banking Industry Products and Services Segmentation

  • Demand Determinants
  • Business activity and economic conditions
  • Residential mortgages

  • Major Markets
  • Consumers
  • Finance and insurance firms
  • Other businesses
  • Professional services and property firms
  • Government
  • Chart: Major Market Segmentation for the Banking Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Interest expenses
  • Wages
  • Bad debts
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Banking

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Banking Industry

  • Industry Globalization
    ANZ Bank New Zealand Limited, Westpac New Zealand Group Limited, ASB Holdings Limited, Bank of New Zealand,
  • Table: ANZ Bank New Zealand Limited - financial performance
  • Table: Westpac New Zealand Group Limited - financial performance
  • Table: ASB Holdings Limited - financial performance
  • Table: Bank of New Zealand - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Banking Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Banking Industry
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Total Assets (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Cash Rate
  • The interest rate charged on overnight borrowings between banks that is set the Reserve Bank.
  • Net Interest Spread
  • The difference between the borrowing and lending rates of a bank.
  • Tier-One Capital
  • Used to measure the financial strength of a bank, this type of capital is generally limited to common shares and retained earnings.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Banking in New Zealand market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Banking in New Zealand:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Banking in New Zealand market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Banking in New Zealand, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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