Retail Banking in New Zealand - COVID-19 Impact Snapshot

Retail Banking in New Zealand - COVID-19 Impact Snapshot

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the world losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020 and many experts predicting the potential onset of recessionary environments.

New Zealand has been able to successfully contain the virus spread with strict lockdown measures and policies, with total confirmed cases as of June 26 at 1,520 and a death toll of just 22. While the crisis has caused the country’s economy to contract, it will gradually recover now that the lockdown restrictions have been largely removed, with banks and financial companies set to benefit.

This report focuses on the impact of the Coronavirus outbreak on the economy and the retail banking industry in New Zealand. Based on our proprietary datasets, the snap shot provides a detailed comparison between pre-COVID-19 forecasts and revised forecasts of total mortgage, consumer, credit card loan balances as well as deposit balances in terms of value and growth rates. It also offers information on measures taken by the government to combat Coronavirus.

Scope

- Like most countries across the world, COVID-19 has also impacted New Zealand’s national economy, affecting the country’s retail banking market and weighing on banks’ profitability and capitalization.
- A drop in interest rates will weigh on banks’ net interest margins, which already have been under pressure due to intense competition in the mortgage market.
- Fee income will fall, driven by decreased retail spending, while non-performing loan ratios will increase - particularly for SMEs. However, support measures implemented by the government, regulators, and banks should alleviate some of the asset-quality pressure that will emerge from this downturn.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the New Zealand's retail lending and deposit industry.
- Understand the key market trends, challenges, and opportunities in the New Zealand's retail lending and deposit industry.
- Receive a comprehensive insight into the total consumer loans in New Zealand, including mortgages, personal and credit card loans as well as retail deposits balances.