sign up log in
Want to go ad-free? Find out how, here.

ANZ New Zealand taps Reserve Bank's Funding for Lending Programme for $500 million to help 'provide competitive lending to the productive parts of the economy'

ANZ New Zealand taps Reserve Bank's Funding for Lending Programme for $500 million to help 'provide competitive lending to the productive parts of the economy'

ANZ New Zealand has tapped the Reserve Bank's Funding for Lending Programme (FLP) for the first time, to the tune of $500 million.

An ANZ NZ spokesman confirmed to interest.co.nz the country's biggest bank accessed the FLP, with this occurring last Friday. It's the last of the country's big five banks to do so.

"ANZ has drawn down $500 million from the Reserve Bank’s Funding for Lending Programme," the ANZ NZ spokesman said.

"It will ensure we’re in the best position to provide competitive lending to the productive parts of the economy as the country rebuilds in the wake of Covid-19 restrictions."

"The funding will also provide a degree of confidence to home buyers looking to take advantage of a more level property market following recent changes by the Government. ANZ’s recent Blueprint to Build offer is a good example of how we can utilise that strong funding base to support our customers and the supply of new housing stock into the NZ market," the ANZ NZ spokesman said.

The Reserve Bank made the FLP available to banks in December last year. Through FLP banks have access to up to $28 billion and have so far tapped $3.556 billion. 

The FLP is designed to provide additional stimulus in response to the COVID-19 pandemic, with the aim of reducing banks’ funding costs - including the deposit rates they pay savers - and lowering the interest rates banks charge their borrowing customers. This, the Reserve Bank hopes, will encourage banks to continue lending in an uncertain world, thus stimulating economic activity.

The funding is structured as floating rate repurchase transactions priced at the Official Cash Rate, currently 0.25%, for a term of three years. Eligible securities for participating banks include New Zealand Government Securities, Kauri debt issues, and Residential Mortgage Backed Securities. Banks can access the funding over a two-year period, and for the equivalent of up to 6% of their total outstanding loans.

*This article was first published in our email for paying subscribers. See here for more details and how to subscribe.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

2 Comments

Oh they are truly masters of the spin at ANZ
"provide competitive lending to the productive parts of the economy"
"...confidence to home buyers looking to take advantage of a more level property market..."

And they blandly provide their support to our government's recent attempt to get the property frenzy under control - clearly saying that there is no need to do anything more, its all good ! ! !

Up
0

"ANZ has drawn down $500 million from the Reserve Bank’s Funding for Lending Programme," the ANZ NZ spokesman said.
"It will ensure we’re in the best position to provide competitive lending to the productive parts of the economy as the country rebuilds in the wake of Covid-19 restrictions."

Talk is cheap given ANZ retains an economic interest in the securities and a haircut is applied if they are RMBS and Kauri debt.

Up
0