RBNZ has a head-start on Australia raising rates. But the CEO of the largest bank in NZ says there has been no impact on spending – a challenge to central bankers.
Antonia Watson, chief executive of the largest bank in New Zealand, ANZ, says central bankers on both sides of the Tasman Sea face a conundrum as they urgently fight inflation: Kiwi consumers are grumpy but still spending freely, challenging policymakers to keep raising rates or lose the fight.
“The mood is quite negative – people are really worried about inflation – but that hasn’t seemed to have an impact on spending yet,” Watson says.While it points to economic resilience, continuing strong discretionary spending is frustrating bankers and monetary policymakers because the longer it continues, the higher official rates may have to go to get the inflation genie back in the bottle.
“There is no doubt there will be people needing to tighten their belts and people who are hurting as rates keep going up. But I feel comfortable with the lending we put people into and the overall state of our book. We are not talking about a GFC here at all. ANZ, which has been active in New Zealand since 1840, grew with major acquisitions in the late 1980s and the early noughties. It is the integration of one of these deals, the National Bank of New Zealand, that is coming back into focus. Suncorp will report its full-year results on Monday.
Commitments were made that no frontline staff would lose their jobs and the bank would not abandon communities where it had a presence. “That was about giving some comfort to our staff and customers, that it wasn’t about a whole lot of people around the country losing jobs and that we were committed to customers, even though we had the one blue brand,” Watson says.
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