Bank on it: A projected rise in the cash rate is anticipated to boost industry revenue growth

The Banking industry has declined slightly over the past five years due to consistent cuts in the cash rate since June 2015. However, residential housing prices have rapidly risen and the property market has remained strong over the period, boosting the value of industry assets and supporting interest revenue. Concerns regarding an overheated residential property market have been slightly tempered as the Reserve Bank of New Zealand has introduced loan-to-value ratio (LVR) restrictions on mortgage lending. However, these limits were slightly eased in the latest round of changes, which came into effect on 1 January 2018. Industry revenue is expected to decline at an annualised 0.5% over the five years through 2017-18...read more.

Industry Statistics & Market Size
Revenue
$24bn
Annual Growth 13-18
-0.5%
Forecast Growth 18-23
Profit
Employment
27,784
Businesses
24

Industry Threats & Opportunities

  • Cash rate cuts have caused revenue to fall over the past five years, despite house prices surging
  • A strong residential property market has helped curb revenue declines for banks
  • Rising house prices have increased the value of mortgages issued by lenders
  • Industry Report - Industry Products Chapter

    Industry players generate most of their revenue from lending activities. Home loans represent the largest market for New Zealand's banks, while lending related to businesses, personal loans and unsecured loans represent other products offered by banks. Banks also receive fees and commissions for providing core banking services, such as opening and maintaining transaction accounts, term deposits, overdraft facilities and other credit facility related fees. However, these services make a small contribution to the overall industry compared with lending services. The industry's products and services are segmented based on their contribution to revenue.Housing loansInterest from housing loans is expected to account for nearly half of industry revenue. The...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
  • Consumers 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
  • Rental, hiring and real estate services
  • Other businesses and governments
  • Agricultural firms
  • 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, ASB Holdings Limited, Westpac New Zealand Group Limited, National Australia Group (NZ) Limited,
  • Table: ANZ Bank New Zealand Limited - financial performance
  • Table: ASB Holdings Limited - financial performance
  • Table: Westpac New Zealand Group Limited - financial performance
  • Table: National Australia Group (NZ) Limited - 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
    Includes:
  • 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 is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    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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