"Banking is not what it used to be"
The constantly changing lending rules in New Zealand are leaving bank employees frustrated, compelling them to leave the industry, according to Omega Capital general manager Noni Martin.
Martin joined the mortgage brokerage in June last year after a long career in retail banking. With many long-time friends and colleagues in the industry, she found that many employees of mainstream banks were becoming fatigued as tighter lending restrictions limited their ability to secure finance for their clients – leaving them frustrated and seeking alternatives.
“It's a very tight community, and the overwhelming feedback is that it's a real chore being in retail lending at the moment,” she said.
Martin claimed that employees felt there were adding little value to their clients as regulating authorities continued to shape the way retail banks considered property lending – and in a competitive job market where their skills could be well used, some chose to find new roles or leave the industry altogether.
“Banking is not what it used to be. It's hard to get a deal done at the bank currently. There is a lot of fatigue for frontline lenders at mainstream banks because so many of the decisions are out of their hands,” she said.
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Nikki Wood, a new broker at Omega Capital who joined the brokerage after 26 years in the banking industry, also claimed that many of her former colleagues left the banking industry in frustration because “everything was getting harder and harder, and for the most part it is all around the compliance, but lending, in general, has become really challenging.”
“You feel like you're not able to get your job done anymore, and you can feel the frustration coming from customers as well,” she said.
She added that requirements like anti-money laundering (AML) compliance and the Financial Services Legislation Amendment Act, while essential, were also creating hours more work.
“You can find yourself in the situation where you have a settlement date on a significant commercial property transaction and the finance is all settled, but it is borderline whether the settlement will go through because the relevant bank accounts haven't been opened because they haven’t finalised all the AML requirements,” she said.
Meanwhile, Martin noted that the government's recent move to intensify building development and stimulate housing by building more houses left developers in a tight position due to banks' tight lending restrictions, which could lead to undesirable results.
“They are moving one lever to open up the development opportunity and activity in the housing market, but they have already put the brakes on with the Reserve Bank tightening credit, so there is a real shortage of funding for these developments to happen,” she said.
“We have already supported a lot of terraced housing and higher density developments where developers have come to us because the banks have said no to financing the projects. Changing the regulations around housing density isn't going to change the lending restrictions.”
