Banks’ own behaviours led to lower profits

Accounting firm KPMG released their annual report card of the banking industry this week and it highlighted that New Zealand banks were not immune from the sorts of bad behaviours indulged in by banks overseas that led to the global financial crisis.
“The drop in profit was mainly due to paying back the government for tax avoidance and having to make big provisions for bad debt as a result of questionable lending,” said Finsec Campaigns Director Andrew Campbell. “These negative behaviours are on the same continuum as those displayed by the Wall Street banks that triggered the global financial crisis.”
“All the banks have fairly “full on” sales cultures so it is not surprising that a lot of that lending has gone pear shaped and the banks have had to make big provisions for bad debt,” said Campbell.
“We think New Zealand banks need to be part of a new global set of rules for banking that increases accountability and reduces the risky business that has characterised banking for far too long,” said Campbell.

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