• 1000
John Kensington - KPMG NZ - Partner

Partner - Audit

KPMG in New Zealand


KPMG’s Financial Institutions Performance Survey (FIPS) reports have provided insights into New Zealand’s financial services sector for over 30 years. Each edition presents industry commentary and analysis on the performance of New Zealand registered banks, together with a range of topical articles from industry experts, regulators and our own business leaders.

Lending and housing

Lending continued to rise, up 1.78% from the previous quarter to $447,052 million. October, November and December each marked new highs for monthly mortgage lending in 2020, with the overall trend tracking up after a drop in April.

The housing market’s consistent climb has helped drive confidence, but efforts to slow it down across the industry highlight that it is a double-edged sword.

All the major banks have reported loan growth over the 12-month period ending December 2020, with locally owned Kiwibank outperforming the pack and growing by almost 11%.

Results and signs of recovery

Reporting for the quarter (October to December) showed a stronger performance than had been predicted, as the banking sector managed the economic impacts of Covid-19. Profits increased by 35.11% against the previous quarter, rising from $1,007.5 million to $1,361.2 million.

The most significant change in this quarter has been the reduction in the level, or even reversal, of provisioning, which has contributed to the banks’ more promising results. Operating costs – down $84.1 million likely due to increased working from home and a focus on essential costs only – also playing a part.

Government support packages have had a huge impact but, overall, the financial resilience of most New Zealanders has been much stronger than predicted this time last year. It is too soon to tell what this means for the future, but there are some positive signs from this quarter’s results. 

Most New Zealanders have proven more resilient financially than expected as a result of Government support packages, shorter lockdowns and a domestic rebound. The big question is - what lies ahead?


While the RBNZ gave the banks some breathing space from implementing upcoming regulation this time last year, it is now firmly back on the agenda. This is demonstrated by the recently announced RNBZ Enforcement Department, which will work alongside RBNZ’s Supervision team.

Two recent examples of major banks having capital and liquidity breaches highlight that there are still significant challenges being faced by the banking sector in how they report that information.