New Zealand Retail Banking: Opportunities and Risks to 2023
New Zealand Retail Banking: Opportunities and Risks to 2023
Summary
The majority of New Zealand’s loan balances outstanding are from home loans, with residential mortgage balances outstanding accounting for 88.7% of total balances outstanding in 2018, followed by personal loans (8.7%) and credit cards (2.5%). However, high household debt and low consumer confidence are expected to negatively affect the growth of total loan balances outstanding in the coming years. As a result, we estimate the balances outstanding to grow at a lower CAGR of 6.4% over 2019-23. The New Zealand lending space is dominated by the big three banks: ANZ, ASB, and Westpac.
Total loan balances outstanding (including credit card balances, personal loan balances, and residential mortgage balances outstanding) in New Zealand recorded a compound annual growth rate (CAGR) of 6.7% during 2014-18 to reach NZ$291.57bn ($195.60bn).
However, they are facing increased competition from non-bank lenders, digital banks, and digital lending platforms that are breaking into the market and offering low interest rates as well as refined loan approval processes. The savings market in New Zealand recorded a CAGR of 7.3% over 2014-18 to reach NZ$180.33bn ($120.98bn) in 2018. The weakening economic situation has led customers to save more.
Based on our proprietary datasets, this report analyzes the New Zealand lending market, with a focus on the consumer lending segment. The report discusses in detail the credit card, personal, and mortgage loan markets, covering market size, competitors’ market shares, and survey insights. The report also provides a market overview and insights on the retail deposit segment. In addition, it covers the key digital disruptors in New Zealand’s retail lending segment.
Scope
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