English urges consumers to take their banks to task

Finance Minister Bill English. Photo/Mark Mitchell

The Government can't control what interest rates banks charge, but customers who feel aggrieved should consider their options, Finance Minister Bill English says.

Responding to a parliamentary finance and expenditure committee report suggesting banks are being tight on mortgage rates and protecting their profits while customers are suffering, English said the Government had made its position clear.

" ... taxpayers are supporting the banks, and we want the banks to be able to demonstrate that they are going to support businesses and households through a tough time in the economy, even if it affects their profits a bit".

MPs expressed concern in the report that some banks did not pass on the latest cut to the official cash rate (OCR), and only Westpac and ANZ National significantly reduced floating rates.

ANZ National has since defended the way it runs its business, saying the OCR was no longer an indicator of lending rates.

"Rather, rates are a function of what we pay for both retail and wholesale borrowings, and these costs have not fallen by nearly as much as the recent falls in the OCR," a spokeswoman said.

ANZ National chief executive Jenny Fagg said this morning the bank's profit for the six months to March was well down on the same period last year.

English said customers were sensitive about their treatment at the hands of banks, and that was something the banks needed to pay attention to.

"Remember, these are organisations with hundreds of thousands of customers, and those customers are keen to see they are treated fairly."

Banks would be tuned to public discussion , but it was up to the customers to respond and consider taking their business elsewhere if they felt they were being short-changed, said English.

NZPA