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.
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