Are bank profits unrealistic?

Drive Thru LoansAccording to the Dominion Post ratings agency Standard & Poor’s believes that banks are making it easier for customers to borrow as they fight to maintain lending growth.

Banks will continue to increase lending volumes during the next six months to maintain profits, which are under pressure from increased competition, it says.

Bank profits rose 7 per cent to a record $3 billion last year.

And, you’ll see that Finsec wiggled its way into the later half of the story with Campaigns Director, Andrew Campbell, reporting that bank staff were under pressure to sell more debt to maintain profits.

ANZ National’s after-tax profit increased 57.6 per cent in the past two years, topping $1 billion, and Bank of New Zealand’s profits gained 37.5 per cent since 2001, Mr Campbell said.

There was an expectation from banks for “unrealistic” double-digit profit growth through more lending and lower lending criteria. (The gossip would also mention more pressure to sell on that list.)

“Are those expectations for ongoing and never-ending profit growth reasonable, particularly if they are driving bad practice?”

(thanks ukslim to for the photo)


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