1
00:00:00,200 --> 00:00:03,440
Speaker 1: Right now. ASB has declared a net profit after tax

2
00:00:03,480 --> 00:00:06,040
Speaker 1: of seven hundred and sixteen million dollars for the six

3
00:00:06,080 --> 00:00:08,639
Speaker 1: months to December. That is up one percent on the

4
00:00:08,680 --> 00:00:11,480
Speaker 1: same period the year before. The bank says home and

5
00:00:11,600 --> 00:00:17,120
Speaker 1: rural lending grew, but operating expenses have increased for everybody.

6
00:00:17,400 --> 00:00:20,720
Speaker 1: It comes as the government's investigating banks and whether they're

7
00:00:20,720 --> 00:00:24,280
Speaker 1: competitive enough. So I'm joined now by the asb's CEO,

8
00:00:24,360 --> 00:00:27,720
Speaker 1: Victoria Short. Hello Victoria, Hi Andrew, how are you good?

9
00:00:27,840 --> 00:00:30,160
Speaker 1: Nice little tick up from last year and so can

10
00:00:30,200 --> 00:00:32,240
Speaker 1: we take from that at corner has been turned in

11
00:00:32,320 --> 00:00:32,879
Speaker 1: the economy.

12
00:00:33,360 --> 00:00:35,159
Speaker 2: Yeah, Well, the way that we're describing it is we

13
00:00:35,200 --> 00:00:40,040
Speaker 2: think that the economic recovery is beginning, and we know

14
00:00:40,080 --> 00:00:42,360
Speaker 2: that inflation's back in target range. We know that the

15
00:00:42,400 --> 00:00:47,800
Speaker 2: OCR or interstrates and moving downwards to more neutral levels.

16
00:00:48,360 --> 00:00:51,760
Speaker 2: And what we can see is that our customers who

17
00:00:51,800 --> 00:00:54,360
Speaker 2: have been doing it taugh in our stress the actions

18
00:00:54,400 --> 00:00:57,320
Speaker 2: are really helping actions. They're taking the actions that we

19
00:00:57,360 --> 00:01:00,920
Speaker 2: can take to support them, and so we are starting

20
00:01:00,920 --> 00:01:03,280
Speaker 2: to see customers moving out of stress situations.

21
00:01:03,840 --> 00:01:08,040
Speaker 1: You have described any future recovery as gradual. What do

22
00:01:08,080 --> 00:01:10,200
Speaker 1: you mean by that it takes time?

23
00:01:10,280 --> 00:01:12,800
Speaker 2: For some of these things to flow through. So, for example,

24
00:01:12,840 --> 00:01:15,880
Speaker 2: about eighty percent of our business or rural customers have

25
00:01:15,920 --> 00:01:20,680
Speaker 2: been on variable loans, and with variable loans, we pass

26
00:01:20,760 --> 00:01:24,440
Speaker 2: through those cash rates very quickly. But we know that,

27
00:01:24,480 --> 00:01:28,480
Speaker 2: for example, people with home loans are mostly fixed and

28
00:01:28,560 --> 00:01:34,240
Speaker 2: around forty five percent of our fixed blending homeowners will

29
00:01:34,400 --> 00:01:36,880
Speaker 2: they will go into a lower rate by June and

30
00:01:36,920 --> 00:01:41,399
Speaker 2: about seventy percent by Christmas, so it's taking some time

31
00:01:41,520 --> 00:01:44,319
Speaker 2: for the benefits of these lower rates to flow through

32
00:01:44,360 --> 00:01:46,880
Speaker 2: and be felt by our particular homeowers.

33
00:01:47,360 --> 00:01:51,440
Speaker 1: You've also described it as the most difficult economic cycle

34
00:01:51,480 --> 00:01:54,480
Speaker 1: and a generation. So how bad has it been at

35
00:01:54,480 --> 00:01:55,400
Speaker 1: its worst?

36
00:01:56,040 --> 00:02:00,040
Speaker 2: Yeah, I think you know what I say. Well, the

37
00:02:00,080 --> 00:02:02,160
Speaker 2: way that I'm really thinking about that is the global

38
00:02:02,200 --> 00:02:06,400
Speaker 2: financial crisis had some serious impacts around the world, but

39
00:02:06,640 --> 00:02:10,240
Speaker 2: wasn't felt as much in New Zealand. When we think

40
00:02:10,280 --> 00:02:14,760
Speaker 2: about what we've gone through recently with COVID and all

41
00:02:14,760 --> 00:02:18,720
Speaker 2: of the challenges with lockdowns and and the like, it

42
00:02:18,800 --> 00:02:22,959
Speaker 2: has been a really difficult period for businesses and households alike,

43
00:02:23,040 --> 00:02:26,200
Speaker 2: and they've been making a lot of adjustments. So that's

44
00:02:26,240 --> 00:02:30,079
Speaker 2: why we say that it really has been a particularly

45
00:02:30,160 --> 00:02:34,160
Speaker 2: difficult period, and then also a lot of confusion. You know,

46
00:02:34,520 --> 00:02:37,799
Speaker 2: rates have gone down quickly, they've come up quickly, they're

47
00:02:37,840 --> 00:02:43,200
Speaker 2: going back down again, and so key decisions around lending

48
00:02:43,720 --> 00:02:46,080
Speaker 2: and when to fix the weather to float. It's been

49
00:02:46,120 --> 00:02:47,239
Speaker 2: quite confusing for people.

50
00:02:47,440 --> 00:02:49,679
Speaker 1: Now you've been dropping interest rates. Your lowest rate is

51
00:02:49,720 --> 00:02:52,120
Speaker 1: currently the eighteen month rate that's at five point one

52
00:02:52,280 --> 00:02:54,440
Speaker 1: nine percent. When do you think we'll break the five

53
00:02:54,480 --> 00:02:55,200
Speaker 1: percent barrier?

54
00:02:57,160 --> 00:02:58,919
Speaker 2: Yeah, so hard to tell. I think you know what

55
00:02:58,919 --> 00:03:02,640
Speaker 2: we're saying. You know, our economists believe that we'll see

56
00:03:02,720 --> 00:03:07,000
Speaker 2: a fifty point decrease next week with the ocr call,

57
00:03:07,320 --> 00:03:10,840
Speaker 2: and we're expecting another two twenty five drops, so one

58
00:03:10,919 --> 00:03:13,920
Speaker 2: hundred basis points to climb in the cash rate for

59
00:03:14,120 --> 00:03:18,000
Speaker 2: this year. So that's our expectations. But we're also quite

60
00:03:18,080 --> 00:03:21,400
Speaker 2: quick to say, you know, people need to be thoughtful

61
00:03:21,400 --> 00:03:25,480
Speaker 2: because interest rates can change depending on world events, and

62
00:03:25,480 --> 00:03:27,880
Speaker 2: we've seen a lot of that over the last few years,

63
00:03:27,960 --> 00:03:30,000
Speaker 2: so we need to be.

64
00:03:29,960 --> 00:03:33,079
Speaker 1: Cautious to Now, Shane Jones is waging a war against

65
00:03:33,080 --> 00:03:35,760
Speaker 1: what he calls woke banking. So what do you make

66
00:03:35,800 --> 00:03:37,600
Speaker 1: of his bill? It would limit who you can do

67
00:03:37,680 --> 00:03:38,120
Speaker 1: business with.

68
00:03:39,640 --> 00:03:41,400
Speaker 2: Yeah, look, I think you know he's posing some good

69
00:03:41,480 --> 00:03:45,200
Speaker 2: questions that need a discussion, and I think it's important

70
00:03:45,240 --> 00:03:47,960
Speaker 2: that to start with, New Zealand has set a net

71
00:03:48,000 --> 00:03:52,120
Speaker 2: zero target and the government has actually reconfirmed its commitment

72
00:03:52,320 --> 00:03:55,480
Speaker 2: to their target, So it really starts there. You know.

73
00:03:55,520 --> 00:03:57,880
Speaker 2: For asb the way we think about it, it's about

74
00:03:57,880 --> 00:04:02,200
Speaker 2: supporting our customers and how they transition. So for our

75
00:04:02,240 --> 00:04:06,120
Speaker 2: customers who are fuel retailers, you know, this transition is

76
00:04:06,240 --> 00:04:09,760
Speaker 2: front and center of their business planning and thinking, and

77
00:04:09,800 --> 00:04:12,600
Speaker 2: we want to support them with those transition activities.

78
00:04:13,160 --> 00:04:15,480
Speaker 1: But a service station operator who's just trying to do

79
00:04:15,560 --> 00:04:18,599
Speaker 1: an honest business and catering for a need that exists,

80
00:04:18,760 --> 00:04:20,160
Speaker 1: feels are done by.

81
00:04:21,440 --> 00:04:24,240
Speaker 2: Well, we're supporting those customers. I guess that's the point

82
00:04:24,240 --> 00:04:27,279
Speaker 2: I'm trying to make. You know, we support fuel retailers.

83
00:04:27,640 --> 00:04:30,880
Speaker 2: We continue to and it's part of what we see

84
00:04:30,960 --> 00:04:32,560
Speaker 2: is our job in supporting a transition.

85
00:04:33,000 --> 00:04:35,520
Speaker 1: Open banking now, the government is very hot on this.

86
00:04:35,760 --> 00:04:38,320
Speaker 1: Have you got it running? And if you do, oh

87
00:04:38,360 --> 00:04:40,000
Speaker 1: you have that's good people using it?

88
00:04:41,200 --> 00:04:45,440
Speaker 2: Yes, so open banking. So yes, we delivered. The whole

89
00:04:45,480 --> 00:04:50,760
Speaker 2: industry delivered two big APIs as we call them, selets

90
00:04:50,800 --> 00:04:56,360
Speaker 2: that interfaces or technology, interfaces between ourselves and our customers,

91
00:04:56,360 --> 00:05:02,039
Speaker 2: information and FinTechs. In essence, we have five FinTechs that

92
00:05:02,080 --> 00:05:06,919
Speaker 2: are live using those that technology, if you like. But

93
00:05:06,960 --> 00:05:08,600
Speaker 2: I guess one of the things that we noticed from

94
00:05:08,600 --> 00:05:11,680
Speaker 2: around the world is open banking just really hasn't had

95
00:05:11,880 --> 00:05:15,680
Speaker 2: significant take ups. So what we want to make sure

96
00:05:15,720 --> 00:05:19,719
Speaker 2: we get right is the safety of customers data and information.

97
00:05:20,160 --> 00:05:21,600
Speaker 2: That's really important, and.

98
00:05:21,600 --> 00:05:24,919
Speaker 1: The education obviously. And finally, you are a CEO of

99
00:05:24,960 --> 00:05:28,839
Speaker 1: a very big company which has international ownership. Do you

100
00:05:28,920 --> 00:05:31,840
Speaker 1: have an opinion on New Zealand's corporate tax levels and

101
00:05:31,920 --> 00:05:34,080
Speaker 1: whether they should be lowered and if they were, would

102
00:05:34,080 --> 00:05:35,560
Speaker 1: that attract more foreign investment?

103
00:05:36,800 --> 00:05:39,320
Speaker 2: Yeah? Look, I think there's quite a lot in that question,

104
00:05:39,400 --> 00:05:42,839
Speaker 2: but you know, the government the government's job to understand

105
00:05:42,880 --> 00:05:46,840
Speaker 2: tax and make the appropriate settings based on how it

106
00:05:46,920 --> 00:05:50,479
Speaker 2: says the box. So I think I'll leave that sort

107
00:05:50,480 --> 00:05:53,159
Speaker 2: of job to the government. But I do think the

108
00:05:53,240 --> 00:05:57,800
Speaker 2: point around foreign investment is a really important one to consider.

109
00:05:58,200 --> 00:06:03,200
Speaker 2: New Zealand really needs international investment, and I think it's

110
00:06:03,240 --> 00:06:05,960
Speaker 2: important to make sure we're not sending mixed signals.

111
00:06:06,279 --> 00:06:08,960
Speaker 1: Very good Victoria Shored, the CEO of the ASP I

112
00:06:08,960 --> 00:06:10,279
Speaker 1: thank you for your time today that

113
00:06:11,000 --> 00:06:14,160
Speaker 2: For more from Heather Duplessy Allen Drive, Listen live to

114
00:06:14,279 --> 00:06:17,320
Speaker 2: news talks they'd be from four pm weekdays, or follow

115
00:06:17,360 --> 00:06:19,120
Speaker 2: the podcast on iHeartRadio