NZ eyes on Oz bank review

Photo / Bloomberg.

New Zealanders could benefit from some of the fringe recommendations to come out of Australia's banking review but fees are already much lower here, a banking expert says.

A Senate inquiry into banking competition started in Sydney on Monday after increasing pressure on the Government to reduce the dominance of the country's four major lenders.

The Australian public has been outraged by hikes in mortgages rates that have been higher than the official cash rate and large payouts to banking executives, including New Zealander Ralph Norris, who received $20 million for heading the Commonwealth Bank of Australia.

Massey University banking expert David Tripe is watching the inquiry with interest but said it was hard to know how many of the proposed changes would be of use to New Zealand.

"There are bits and pieces around the edges that might have some advantages to consumers.

"But I think the big driver there is that Australian banks have been somewhat insensitive and this can almost be seen as vindictive."

Tripe said the New Zealand banking market already appeared to be fairly competitive.

"Despite having fewer competitors it appears to be tighter here."

Many of the changes being proposed in Australia were not a problem here.

"The home loan exit fees - we haven't had those for a long time."

Tripe said the Australian banks appeared to have been highly insensitive to the economic conditions.

"In New Zealand they seem to be a bit more sensitive to the market."

Many banks' fees were already much lower in New Zealand than they were in Australia, he said.

But some areas could be of interest to New Zealand including the automatic forwarding of transactions.

Tripe said changing automatic payments was seen as a major barrier for many people considering switching banks.

If a system could be created that would move it all as one, it could be attractive for New Zealanders.

Portable mortgage insurance was also another good idea as people ended up paying for it at one bank only to have to pay it again if they switched.