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Retail Banking in New Zealand: Coronavirus (COVID-19) Sector Impact

April 2020 | 17 pages | ID: RE69230DA23BEN

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Retail Banking in New Zealand: Coronavirus (COVID-19) Sector Impact


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 globe 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.
A similar trend is expected in New Zealand, as economic growth in the country is predicted to have dipped in the first quarter of 2020 and will decelerate further if the disease is not controlled at the earliest possible opportunity. The decline will have an adverse impact on all sectors, including the banking industry.
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.

  • Like most countries across the world, New Zealand is on track for a sharp recession as COVID-19 is having a major impact on the local economy. This will directly affect the country’s retail banking market, 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.
  • 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.
COVID-19 Update
Impact Assessment
Retail Deposits
Total Consumer Loans
Mortgage Loans
Credit Card Loans
Other Consumer Loans
Supplementary Data
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