News and Media Releases/Publications » Opinions » The skinny on bank profits and margins

The skinny on bank profits and margins

28.09.2011

I was concerned to see recent commentary that bank profits are up due to an increase in the banks’ net interest margin. 

It is just too simplistic to view margins in isolation, and to fail to take into account the changes in the cost of funding, global economic conditions, the quality of bank assets, and bank operating efficiency.

A strong, robust and secure banking system underpins New Zealand’s economic development. We weathered the financial crisis well compared to other countries. Profits are an important part of our banks’ strength, as is the basis of those profits.