BNZ tells coal mine it will shut bank accounts by 2030, Shane Jones wants intervention, Nicola Willis wants banks back before committee

A coal mining firm was told by BNZ that it would slowly have banking services withdrawn, culminating in the cancellation of credit cards and the closure of “all bank accounts” by 2030, forcing it to look for another bank.

The letter has provoked fury from NZ First Minister Shane Jones, who has said he will “do everything he can” to allow the mine, which does not wish to be named, to continue banking. He said NZ First has a member’s bill that addresses the issue, while Finance Minister Nicola Willis said bank chief executives should once again be hauled before a Parliamentary bank inquiry to explain themselves.

“We’re going to do everything we can to prevent this Aussie-owned bank from inflicting their luxury beliefs on this God-fearing Kiwi business,” Jones told the Herald.

NZ First MP Shane Jones opposes "de-banking". Photo / Mark Mitchell

The letter, which was sent in 2023, set out “exit dates” for banking services BNZ offered the mine.

These include closing the mine’s asset finance facility by the beginning of this year, shutting lending facility by July, and cancelling credit cards and closing all accounts by 2030.

In the letter, BNZ said it was making the decisions in response to its coal mining policy which included capping coal exposure since 2019, exiting thermal coal mining by 2025 and exiting metallurgical coal by 2030. Metallurgical coal, known as coking coal, is used to produce steel.

“These are parts of BNZ’s commitments to the Paris Agreement on climate change. The bank wants to support customers’ transition, and where transition is not possible provide advance notice of exit dates for banking services such that customers can seek alternate providers,” the letter said.

The letter comes at a time when New Zealand banks are coming under intense scrutiny for the effect their environmental policies are having on businesses, with petrol stations, mining and agriculture all voicing fears about being “de-banked” in recent weeks. On Thursday, the Act Party joined the fray, with its Rural Communities spokesman Mark Cameron saying the Primary Production Committee’s inquiry into rural banking had not changed his suspicion “that a cabal of woke banks is neglecting rural communities in the name of climate action”.

“Banks are starving rural New Zealand of capital. Farmers have long complained they’re getting a raw deal on loans compared to their urban cousins,” he said.

A BNZ spokesperson told the Herald it announced its commitment to reduce its exposure to coal in 2019, aligning with the New Zealand Government’s Net Zero 2050 target.

“We have committed to exit all lending to thermal coal mining by 2025 and exiting all lending to coal mining by the end of 2030. This approach applies across both BNZ and NAB [National Australia Bank, BNZ’s parent).

“We have been very upfront and open with impacted customers, communicating with them early and regularly to ensure they had time to prepare for this change.

“With 27 registered banks in New Zealand, alongside numerous non-bank lenders, and a growing number of fintechs looking to move into the banking services space, customers have significant choice when deciding who to bank with,” the spokesperson said.

The spotlight has fallen on banks’ membership of the Net-Zero Banking Alliance, a UN-backed initiative to encourage banks to help the world reduce emissions to net zero.

While only BNZ is a member of the alliance in its own right, the Australian owners of New Zealand’s “big four” banks have signed up to the pledge. The alliance was well-supported when it was launched in 2021, but the rightward political lurch in North America has seen the largest American and Canadian banks leave the alliance.

Finance Minister Nicola Willis thinks the banks should come back to the select committee inquiry to explain themselves. Photo / Mark Mitchell

For the moment, Australia’s banks are staying put, although there appears to be a push to adjust some of the alliance’s more rigid goals. In Australia, Liberal leader Peter Dutton is reported to be looking at a regime that would intervene in the issue - although details are scarce and the party has not officially committed to a regime.

Jones is fuming saying rural businesses and the extractive industries would “not be frog marched to the altar of climate cultism”. His attack comes as he heads to Waihī for what is being previewed as a significant speech on mining and its importance to New Zealand’s economy.

The BNZ does not do a great deal of lending to coal companies. Its most recent Climate Statement reported that in September 2023 it lent or authorised to lend less than $1m to coal mining companies. That had fallen to 0 by the same month in 2024. The statement also showed it was reducing the amount authorised to lend to oil and gas firms, although the amount those firms actually borrowed grew slightly.

Jones said the banks were imposing “white-collar virtue signals” on the productive sector. He said that while some may ask whether it is possible to “force” the banks to lend money to people they did not want to, “the banks operate within the context of an operational licence”.

He said the banks had no right to withdraw services from clients who were engaging in lawful business.

“The Aussie banks have profited over many decades from the fossil fuel industry, which by the way, is still necessary for the modern industrial, for modern industrial civilisations,” he said.

A similar regime to what the Australian Liberals are looking at could be on its way to New Zealand.

Jones said an anti-de-banking member’s bill had already been agreed to by NZ First’s caucus.

“It’s being developed and it is being finessed,” he said, adding he would take the issue up with Minister for Regulation David Seymour.

Seymour told the Herald he was always happy to talk to Jones, but wondered whether banks’ hesitation to lend to fossil fuel companies was less to do with wanting to be seen as sustainable and more to do with the wider regulatory environment, which meant that the extractive industries were an uncertain bet - particularly if the Government were to change to one less favourable to the extractive industries.

“I suspect that part of it is the cultural cringe factor that Shane is alluding to, but I suspect that often these noble causes that companies present are a cover for deeper concerns, and I fear that the reason that banks are reluctant to bank farmers and miners and oil and gas exploration is the very rational belief or fear that governments will regulate away their investment,” he said.

David Seymour warns the issue is the uncertain regulatory environment. Photo / Michael Craig

Seymour said the solution probably was a more lasting and predictable regulatory environment.

“It may be the ideological capture he has identified is the problem, but it may also be that the really tough regulatory environment has made unpopular industries unsafe to bank because if you are unpopular the regulators can take a swipe at you,” he said.

Willis said “the Parliament select committee should call the bank chief executives back in”.

She said it “would be very concerning for New Zealand as a whole if banks ganged together to stop giving finance to things that New Zealanders need. We still need petrol stations. If banks collectively chose not to bank petrol stations that would be a problem for every New Zealander”.

She said the banks could explain “why they’re taking those positions” to the committee.

Ironically for Jones, at least some of the regulatory settings he is frustrated with were initiated by the Labour-NZ First-Green Government in August 2020 when then-Climate Change Minister James Shaw got Cabinet’s approval to usher in a climate disclosure reporting regime - although the regime was only passed into law in the subsequent term, when NZ First was no longer in Parliament. Those disclosures are currently under review and may be watered down or scrapped.

Jones also took a swipe at Government-owned bank Kiwibank for its climate policies. Kiwibank offers banking services to mines and petrol stations, but it will not offer services to businesses involved in fossil fuel extraction.

Jones told Newstalk ZB’s Mike Hosking Breakfast that he was astounded Kiwibank seems to have “swallowed the green-aid here”.

“If NZ First would have known that Kiwibank was going to be involved in this type of falsehood, it would be highly unlikely we would have agreed for them to recapitalise,” he said.

“I’m hoping that Kiwibank reconsiders their position,” he said.

Willis would not say whether she thought the remarks were appropriate, but said Jones was expressing his view.

Jones told the Herald Kiwibank chief executive Steve Jurkovich had agreed to meet with Deputy Prime Minister Winston Peters and himself.

“The purpose of the meeting is to engage with them with a view that as the Government-owned bank, they have to be supporting regionally-owned businesses that are legitimate export earners and large employers, including the coal industry,” Jones said.

When asked by the Herald whether Kiwibank was willing to change its blanket decision not to lend to businesses primarily involved in the extraction and production of coal, oil and gas, the bank did not directly address the question.

“These are complex and changing issues and we want to ensure that there are no unintended negative consequences from our business decisions. Therefore, we’ll regularly review our policy against changing public expectations and key issues and risks,” a spokesperson said.

Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the Press Gallery since 2018.