Poor returns: Players reclassifying as banks and exiting the industry has shrunk revenue

The Non-Banks and Other Financial Institutions industry has performed poorly over the past five years. The exit of building societies and credit unions through their reclassifications to banks, a declining cash rate and shrinking market interest rates have been the major factors driving the industry’s revenue decline over the period. The move by some non-bank lenders like Heartland Bank from building society to banking has taken away a large proportion of industry asset, reducing the amount of interest revenue generated by the industry. The decline of interest rates through consistent cuts in the cash rate by the RBNZ has further compounded the fall of industry revenue. Overall, industry revenue is forecast to decline at an annualised 4.7%...read more.

Industry Statistics & Market Size
Revenue
$2bn
Annual Growth 13-18
-4.7%
Forecast Growth 18-23
Profit
Employment
3,272
Businesses
644
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • The switch to banks by some lenders and a falling cash rate have negatively affected the industry
  • Non-bank lenders have failed to fully capitalise on growth in the residential property market
  • Rising interest rates are forecast to support industry revenue growth over the next five years
  • Industry Report - Industry Analysis Chapter

    Revenue for the Non-Banks and Other Financial Institutions industry has declined over the past five years. The reclassification of some building societies and credit unions as banks has been the major factor behind the industry’s revenue decline over the period. The assets of enterprises exiting the industry have been reclassified as belonging to the Banking industry, driving down the Non-Banks and Other Financial Institutions industry’s loan books and the interest revenue generated on these assets. This has been combined with an overall fall in interest rates over the past five years on the back of consistent cash rate cuts since June 2015 and fierce competition from the major banks, which has driven down industry profitability. Ove...purchase to read more.

    Additional Insights for the Non-Banks and Other Financial Institutions Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Non-Banks and Other Financial Institutions Industry are

  • Economies of scope
  • Access to highly skilled workforce
  • Access to the latest available and most efficient technology and techniques
  • IBISWorld analysts also discuss how external factors such as Cash rate and Business confidence index in the Non-Banks and Other Financial Institutions industry impact industry performance..

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    What's in this report

    What is the Non-Banks and Other Financial Institutions in New Zealand Industry?

    Industry operators primarily provide finance to retail and commercial customers, except operating banks. This includes both deposit-taking and non-deposit taking firms that provide credit to retail, corporate and wholesale customers primarily on a financial-service basis.

    Industry Products
  • Personal loans
  • Commercial loans
  • Housing finance
  • Finance leases
  • Industry Activities
  • Providing and maintaining deposit accounts
  • Mortgage lending
  • Personal lending
  • Commercial lending
  • Providing finance to rural producers
  • 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
  • Business confidence index
  • Capital expenditure by the private sector
  • Residential housing loan rates

  • Current Performance
  • Mutual organisations
  • Trading landscape
  • Technology
  • Chart: Revenue Growth

  • Industry Outlook
  • Interest rates
  • Operating environment
  • Technology
  • Table: Non-Banks and Other Financial Institutions Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Non-Banks and Other Financial Institutions Industry Lifecycle vs The Economy

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

  • Key Selling Industries
  • Accounting Services in New Zealand
  • Funds Management and Other Investment Services in New Zealand
  • Legal Services in New Zealand

  • Products & Services
  • Personal loans
  • Commercial loans
  • Housing finance
  • Finance leases
  • Chart: Non-Banks and Other Financial Institutions Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Individual consumers
  • Businesses
  • Households
  • Agribusinesses
  • Chart: Major Market Segmentation for the Non-Banks and Other Financial Institutions 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 Non-Banks and Other Financial Institutions

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Non-Banks and Other Financial Institutions Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Non-Banks and Other Financial Institutions 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 Non-Banks and Other Financial Institutions 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
    Fintech
  • A type of company or service that makes use of innovative technology and relates to the financial services sector.
  • Mutual Organisations
  • Financial institutions owned by members and operated for their benefit. They often reinvest profits to offer cheaper loans and higher savings rates for members.
  • Net Interest Margin
  • A measure of the difference between interest received and interest paid relative to the interest-earning assets of a lender.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Non-Banks and Other Financial Institutions 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 Non-Banks and Other Financial Institutions 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 Non-Banks and Other Financial Institutions 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 Non-Banks and Other Financial Institutions 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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