Banks still raking it in
April 23rd, 2008Yesterday the ANZ reported another huge profit even with very large write downs and provisions for bad debts. A mere $510m for the six months to date is not too shabby though we can expect 2008 to be much harder going as loan demand (and supply) falls and consumers pare back on expenditure. We are already seeing signs of that with credit card spending falling along with credit card balances increasing.
But what really stands out is the $3.2bln the banks made in New Zealand in 2007. That is a lot of dough, the majority of which comes from the ability to create money into existence via interest bearing loans.
In the last 10 years loans have risen from $127bln to $323bln an increase of 154%….in 10 years!!!
In that time house prices (from QV data) have risen 178%.
It’s good to see Kiwibank taking a bigger part of this market because at least the profits stay with the taxpayer. And of course the right to create money is a sovereign one so why not have a “national” bank. That’s something worth thinking about.
Tags: banking, credit, interest, money, money reform, money supply, mortgage, new zealand, reserve bank of new zealand