How Safe Is Your Bank?
Financial experts say New Zealand banks are well-placed to survive the events of the past week with minimal damage. NZ banks are stronger, better regulated, simpler and cleaner than the US investment institutions that collapsed or were bailed out in the world's biggest financial crisis since the great crash of 1929, they say. "They have got quite a lot of capital and last year they generated a combined $17 billion of profit, so they have a lot of capacity to absorb losses," said David Tripe, the director of Massey University's Centre for Banking Studies. "Also, the majority of their business is lending to business people and home owners and that's not such a risky activity." The nervousness is natural, given that well-known and apparently impregnable institutions such as Lehman Bros, Merrill Lynch and AIG disintegrated in a cloud of toxic debt and investor panic within days. NZ Reserve Bank Governor Alan Bollard said that while New Zealand would "inevitably feel the effects of major financial shocks such as this", our banks were not involved in the complex financial transactions that caused significant losses in many of the large global institutions. The Australian banks that own our main banks will, however, not escape completely unscathed from the credit crunch. They have about $500 million of loans with Lehman Bros and it's not clear how much they have lent to AIG and others that may fall over. The Emigration Group is pleased to acknowledge ANZ as its priority referral partner bank. ANZ and The National Bank: Owned by the AA-rated ANZ Banking Group in Australia, the two banks combined are New Zealand's largest, with $114.9 billion in assets. If you would like to open a bank account in Australia or New Zealand, please contact Geraldine Collett at ANZ Bank in London on 0203 229 2884 or email: Geraldine.Collett@anz.com