Insights show positive management of finances
Despite tough economic conditions, New Zealand bank customers are handling their financial responsibilities well, according to the New Zealand Banking Association’s (NZBA) latest retail banking insights for January to June 2024.
Credit card usage remains prudent
Out of 2.23 million credit card holders, 67.2% paid off their balance in full each month, avoiding interest charges. This marks a 0.6% increase from the previous six months, showing that customers continue to manage their credit responsibly, with the average monthly spend per card at $2,072.
Stable home loan repayments amid economic pressures
With 1.38 million home loans across 1.14 million customers, most are keeping up with their mortgage repayments.
Only 1.4% are behind on payments, while nearly 40% are making more than the minimum repayment, though this figure has dropped slightly from the previous period.
The average home loan value for first-time buyers was $472,361, the NZBA study found.
Term deposits gain traction
As interest rates increased earlier in the year, term deposits became more attractive, with their value rising 6.6% to $183 billion.
The average interest rate on term deposits stood at 6.1%, a slight improvement from previous months, but expected to decline after the Reserve Bank’s August rate reduction.
Customers adapting well to financial pressures
NZBA CEO Roger Beaumont (pictured above) commented on the resilience of bank customers.
“These insights provide a wider picture that shows, despite these headwinds, the vast majority of New Zealanders are managing their financial situation well,” Beaumont said.
Rising use of digital banking
The shift to digital banking continues, with 72.2% of customers registered for online banking, up slightly from the previous period. More than 5.5 million users are actively engaging with internet or mobile banking services, marking a 2.6% increase.
Hardship applications and savings patterns
The number of customers applying for hardship status rose slightly by 1%, while the value of savings accounts dropped 6.1% to $106 billion, with an average balance of $15,800. Savers, however, continue to benefit from higher interest rates on term deposits, even as overall savings account balances decline.
Read the announcement and access the full report on the NZBA website.
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