FIPS Non-Banks: Review of 2015

FIPS Non-Banks: Review of 2015

New Zealand’s non-banks faced increasing margin pressure in 2015, with decreased interest margin, additional compliance cost and front-end technological improvements.

John Kensington - KPMG NZ - Partner

Partner - Audit

KPMG in New Zealand

Wellington waterfront

A year of fast-paced competition and change

One of the key themes from Financial Institutions Performance Survey (FIPS) Non-Banks 2015 was the emergence of peer-to-peer (P2P) lenders. There are now four P2P lenders licensed to operate in New Zealand. There has also been a high level of M&A activityacross the sector; with large deals involving GE Capital, Warehouse Money, and Fisher & Paykel (F&P) Finance.

Overall, the non-bank sector is optimistic about business opportunities heading into the 2015/2016 year.

Key findings from the survey reveal:

  • The sector achieved net profits of $254.62m in 2015, which was a 6.7% decrease from 2014. This was a solid performance considering the challenging environment.
  • Although there were strong increases in interest and other income, this was more than offset by an increase in operating expenses of $48.49m.
  • The sector faced increasing margin pressure, with the interest margin decreasing some 32 basis points. Organisations also incurred additional cost around compliance, and improving the technological front end of their businesses.

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