1 00:00:00,240 --> 00:00:02,880 Speaker 1: Bit of verbal over the bank profits and interest rates. 2 00:00:02,880 --> 00:00:06,320 Speaker 1: So am Zenda bumped bumped asn't hiked their floating rates? 3 00:00:06,360 --> 00:00:09,320 Speaker 1: So today becunning in these Squirrel mortgages. Boss who suggests 4 00:00:09,320 --> 00:00:11,640 Speaker 1: that that will add twelve million to the bank's bottom line. 5 00:00:11,960 --> 00:00:14,440 Speaker 1: He's the CEO of Squirrel, of course, and he's with 6 00:00:14,480 --> 00:00:18,400 Speaker 1: a stavid morning, Hello mate, trick hereers do others follow? 7 00:00:19,560 --> 00:00:22,400 Speaker 2: Well no, because all pan zeb was doing was adjusting 8 00:00:22,600 --> 00:00:25,400 Speaker 2: upwards to where other banks were. It was almost like 9 00:00:25,520 --> 00:00:28,840 Speaker 2: they misstepped and went a little bit far and ooks, well, 10 00:00:28,920 --> 00:00:32,120 Speaker 2: others are higher. So in this extremely competitive banking market, 11 00:00:32,200 --> 00:00:33,520 Speaker 2: let's match everyone else. 12 00:00:33,680 --> 00:00:36,000 Speaker 1: So that's not that's not a gooppoly, that's a scandal. 13 00:00:36,040 --> 00:00:38,479 Speaker 1: That's that's into the Minister of Finance to fix the 14 00:00:38,479 --> 00:00:40,040 Speaker 1: competition problem, or is it. 15 00:00:40,360 --> 00:00:43,600 Speaker 2: Well, well, no, it's it's it's not a scandal. It's 16 00:00:43,680 --> 00:00:46,360 Speaker 2: just the way the banking system and ologopolies work. You know, 17 00:00:46,400 --> 00:00:49,440 Speaker 2: they grab a take to the same to the same price. 18 00:00:50,080 --> 00:00:53,680 Speaker 2: And yeah, you had the az On on your show 19 00:00:53,800 --> 00:00:56,160 Speaker 2: last year last year and as she said, you know, 20 00:00:56,200 --> 00:00:57,840 Speaker 2: you put your price down if one matches, you put 21 00:00:57,880 --> 00:00:59,440 Speaker 2: your proce down to get everyone matches. And it's a 22 00:00:59,520 --> 00:01:01,360 Speaker 2: race to the boom, and no one wins, so why 23 00:01:01,400 --> 00:01:05,319 Speaker 2: bother was almost implication Who wins the banks, who loses 24 00:01:05,360 --> 00:01:07,760 Speaker 2: the customer? So as a customer, you've got to play 25 00:01:07,800 --> 00:01:08,119 Speaker 2: the game. 26 00:01:08,240 --> 00:01:09,080 Speaker 1: Who's im floating? 27 00:01:09,120 --> 00:01:13,240 Speaker 2: Anyway, About ten percent of all the balances at home 28 00:01:13,280 --> 00:01:15,680 Speaker 2: loans are in New Zealand. In New Zealander so sit 29 00:01:15,760 --> 00:01:18,000 Speaker 2: a close to four hundred billion of home loans, So 30 00:01:18,000 --> 00:01:22,160 Speaker 2: about ten percent is forty billion, so everyone's often people 31 00:01:22,200 --> 00:01:24,960 Speaker 2: have a better on floating for flexibility, the bulk on 32 00:01:25,120 --> 00:01:28,520 Speaker 2: fix and when your fixed rate finishes, you're automatically roll 33 00:01:28,600 --> 00:01:30,440 Speaker 2: for floating. So that happened to me last year, my 34 00:01:30,840 --> 00:01:34,200 Speaker 2: loan roll to floating. I forgot and suddenly I was 35 00:01:34,200 --> 00:01:35,440 Speaker 2: paying one and a half percent more. 36 00:01:35,440 --> 00:01:38,520 Speaker 1: You forgot. So you're the heat of David. You're the 37 00:01:38,560 --> 00:01:41,039 Speaker 1: head of Squirrel Mortgages and you're not in charge of 38 00:01:41,040 --> 00:01:42,000 Speaker 1: your own mortgage. 39 00:01:42,360 --> 00:01:44,679 Speaker 2: Well, you know it does your life talking to you 40 00:01:44,959 --> 00:01:47,640 Speaker 2: and others, but you know this is what happens, and 41 00:01:47,720 --> 00:01:50,360 Speaker 2: so you know that bolsters bank profits because here's the think. 42 00:01:50,480 --> 00:01:52,840 Speaker 2: Like the floating rates five to seventy nine, the one 43 00:01:52,880 --> 00:01:56,200 Speaker 2: you fixed rates four point four to nine, simple question, 44 00:01:56,400 --> 00:01:59,400 Speaker 2: why it's just a bolstering bank profit. So you add 45 00:01:59,480 --> 00:02:02,840 Speaker 2: up to that quarty billion sorry, yeah, forty billion, and 46 00:02:02,920 --> 00:02:05,240 Speaker 2: multiplier by one, you know, one point three percent. You're 47 00:02:05,280 --> 00:02:06,880 Speaker 2: talking set of five hundred million of it. 48 00:02:07,600 --> 00:02:09,480 Speaker 1: You might be the scalability. If I look at the 49 00:02:09,560 --> 00:02:11,240 Speaker 1: number and go zero point one, I go, what do 50 00:02:11,320 --> 00:02:13,280 Speaker 1: I care? But when you do it tens of thousands 51 00:02:13,280 --> 00:02:15,120 Speaker 1: of times. But that's where your twelve million comes from. 52 00:02:15,160 --> 00:02:17,919 Speaker 1: And that's why I bankspect the money they do right exactly. 53 00:02:18,000 --> 00:02:20,440 Speaker 2: And you know it's probably about twenty five dollars each 54 00:02:20,520 --> 00:02:23,520 Speaker 2: year for a few hundreds of thousands of people. And 55 00:02:23,600 --> 00:02:25,880 Speaker 2: that's that's the secret. And banking is it a little 56 00:02:25,919 --> 00:02:28,640 Speaker 2: bit here, multiplied by many people. And mostly it's an 57 00:02:28,680 --> 00:02:31,320 Speaker 2: electronic system these days, so you know you costs don't 58 00:02:31,320 --> 00:02:33,920 Speaker 2: go up, but yeah, you know your revenue does. So 59 00:02:34,240 --> 00:02:35,839 Speaker 2: Welcome to the banking Oligopoley. 60 00:02:36,360 --> 00:02:38,720 Speaker 1: Always good to talk to you, David go well, David Cunningham, 61 00:02:38,720 --> 00:02:42,119 Speaker 1: who's the boss of Squirrel Mortgages. By the way, when 62 00:02:42,200 --> 00:02:44,119 Speaker 1: was I reading one route the other day? Lending rose 63 00:02:44,200 --> 00:02:47,160 Speaker 1: nineteen percent in November. These are the latest numbers. Nineteen 64 00:02:47,200 --> 00:02:49,840 Speaker 1: percent in November, so that's eight point eight billion dollars 65 00:02:49,880 --> 00:02:53,920 Speaker 1: of new mortgages, which seems to indicate that the housing 66 00:02:53,960 --> 00:02:55,880 Speaker 1: market is at least got a little bit of life 67 00:02:55,919 --> 00:02:56,200 Speaker 1: into it. 68 00:02:56,680 --> 00:02:59,560 Speaker 2: For more from the Mic Asking Breakfast, listen live to 69 00:02:59,680 --> 00:03:02,760 Speaker 2: news Hark Set B from six am weekdays, or follow 70 00:03:02,800 --> 00:03:04,359 Speaker 2: the podcast on iHeartRadio.