Peters blasts bank profits

INVERCARGILL - New Zealand First leader Winston Peters has railed against overseas-owned banks, likening their sales activities to those of drug dealers.

Campaigning in Invercargill, Mr Peters told a meeting that "overseas banking cartels" controlling the financial sector were profiteering at the expense of New Zealanders.

A Massey University survey of bank profits showed they were making more than 22 per cent return on their investments, confirming New Zealanders' suspicions that they were "being robbed blind in the interests of foreign shareholders," he said.

After taxpayers had bailed out the Bank of New Zealand at a cost of billions of dollars, it was sold to the National Australia Bank for $1.5 billion in 1992 and had already returned its new owners nearly $1.8 billion.

Mr Peters criticised bank activity fees that had risen from an average 6c in 1981 to 24c this year.

Additional costs included cheque charges rising from 15c to up to 75c, overdraft fees of $15, a $25 charge for a dishonoured cheque and a $5 automatic payment fee.

"This is extortion, given the efficiency of modern computer systems and the monopoly position enjoyed by the banks."

While banks were upping charges to customers, they were slashing their own costs - 10,000 New Zealanders had lost their jobs in banks in the past decade, while 555 branches had been shut.

Mr Peters also criticised WestpacTrust's restricting use of its cash machines to its own customers.

"That is a gross abuse of the position of market dominance it has achieved by simply buying out the opposition.

"The banks see New Zealand as no more or less than a Monopoly game, though played with real money. The problem is it is our money being played with.

"The sales process used on the New Zealand consumer by these overseas-owned banks is little different to those used by a drug dealer in Los Angeles," said Mr Peters.

"First, entice the user with a cheap and exciting product. Second, when the user is hooked, raise the price to the limit the market will bear.

"Third, buy up or frighten out the local competition. Fourth, buy off the local heat. Fifth, retire to Miami in respectable if very comfortable obscurity and hope your sins won't catch up with you."

Mr Peters said New Zealand First would set up a full-scale inquiry into bank charges and audit institutions offering financial products to the public. It would also merge the banking and insurance ombudsman offices into a financial services commissioner. - NZPA