“It seems like they increased their mortgage rates at a faster pace than deposit rates.”
Due to rapid increases in the Official Cash Rate (OCR), the average mortgage rate now sat around 7 per cent, from a record low 2.25 per cent a few years ago.
Borrowers had already started to roll off their lower fixed rates on to rates twice or three times as high, Parker said.
Bank finances would importantly show evidence of the level of stress in the financial system through the number of non-performing loans on their books, or the amount they provisioned against bad debts.
“It will be interesting to see now whether they do increase that [provision] again with this sort of expectation that we might be heading for a recession in the second half of this year.”
Anecdotally, bank chief executives could also shed light on how Kiwis were coping with the economic environment through support discussions with banks, consumer loans and the amount of money customers had in their accounts.
Another point of discussion for bank executives could be United States bank collapses - a third regional bank failed this week.
JPMorgan Chase bought almost all of First Republic Bank from regulators for US$10.6b ($17.14b) on Monday, taking on US$92b of First Republic’s customer deposits and $173b worth of loans.
“Anything like this in the US is going to catch the eye of our banks,” Parker said.
A Reserve Bank of New Zealand assessment released on Monday concluded that New Zealand’s major banks were not as exposed as US banks to the risks caused by rapidly rising interest rates.
“I think that our banks are very stable,” Parker said.
Listen to the full podcast for more from on bank reporting season and the First Republic collapse.
Stock Takes is available on iHeartRadio, Spotify, Apple Podcasts, or wherever you get your podcasts. New episodes come out every Wednesday and are brought to you with support from Fisher Funds.
