Cashing in: A rising cash rate is anticipated to boost industry revenue growth

The Banking industry has exhibited weak growth amid a low interest rate environment over the past five years, with consistent cuts in the cash rate since June 2015. However, a strong residential property market and robust mortgage lending activity over most of the past five years have boosted the value of industry assets and supported interest revenue. The Reserve Bank of New Zealand's loan-to-value ratio restrictions have had their intended effect, slowing housing price growth over the past year. Several rounds of changes, which came into effect on 1 January 2018 and 1 January 2019, have eased these limits. Overall, industry revenue is expected to rise at an annualised 0.3% over the five years through more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • The industry has posted weak growth as interest rates have remained low over the past five years
  • A strong residential property market has helped support industry asset and revenue growth
  • Increased capital requirements are likely to boost revenue as banks seek to maintain profitability
  • Industry Report - Industry SWOT Analysis Chapter

    The Banking industry is in the mature phase of its economic life cycle. Industry value added, which measures an industry's contribution to the overall economy, is forecast to rise at an annualised 3.2% over the 10 years through 2023-24. This represents an outperformance of overall GDP, which is projected to grow at an annualised 3.0% over the same period. However, much of the growth will likely be due to the strong rise in residential property prices, which have boosted industry assets, rather than the introduction of new products and services that provide new revenue streams.The declining number of establishments is also indicative of a mature industry, despite the number of enterprises rising slightly. Ope...purchase to read more.

    Additional Insights for the Banking Industry

    IBISWorld has determined the most important Key Success Factors for the Banking 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
  • 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
  • Households
  • Other businesses
  • 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
  • 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, National Australia Group (NZ) Limited, Westpac New Zealand Group Limited,
  • Table: ANZ Bank New Zealand Limited - financial performance
  • Table: ASB Holdings Limited - financial performance
  • Table: National Australia Group (NZ) Limited - financial performance
  • Table: Westpac New Zealand Group 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
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)
  • Total Assets (2010-2024)

  • 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 offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    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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