Kiwibank successful at keeping banking costs down? Apparently not.

One of Labour’s big claims and justifications for them deciding to launch an insurance company to compete with the other 96 insurance companies in New Zealand was that Kiwibank had done a wonderful job of keeping banking costs down.

Hmmm…the NZ Herald reports something altogether different from Labour’s claims.

New Zealand’s big four banks collectively made more than $3.5 billion of profit in the last year in another record year for the sector.

Profits grew more than 9 per cent on 2011/12 – a boost of $303 million across the ANZ, Westpac, ASB and BNZ.

John Kensington, head of financial services at KPMG, said loan growth, lower funding costs and less pressure in competing for deposits had helped boost the bank profits.

At the same time the banks had also managed to keep a tight lid on costs while holding on to their margins. ?

Looks like Kiwibank isn’t going as well as they thought in making sure foreign owned banks aren’t creaming it.

Another Labour and Cunliffe fail.

Kensington said it was also positive the banks were not leaning on the Government in any way and their growth could indicate the New Zealand economy was headed in the right direction.

Except for Kiwibank of course…which has taken $860 million of taxpayers money and never paid a single dividend….yeah that’s a cool business model.