A review of things you need to know before you sign off on Monday; new loan option for seniors, another power price spike, AIA shamed, RBNZ to have capital rules reviewed, ASB rated 'positive', swaps stable, NZD stable, & more

Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).

MORTGAGE RATE CHANGES
No changes to report today, although see the new Heartland Bank loan launch below. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Both the Police Credit Union, and General Finance have trimmed rates today. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

MORE 'KILLER' ELECTRICITY PRICING
The start of the week has brought another bout of very high electricity prices, sure to undermine the viability of many manufacturing facilities again. Prices nationally exceeded $400/MWhr for most regions and have stayed up. Low winds and low lakes pulled generation by renewables down close to just above 80%.

BUSINESS SENTIMENT STAYS UP, SO DIES INFLATION
The March update of the ANZ business confidence survey is out. While business confidence was flat at +58 in March, expected own activity rose 4 points to +49. Past own activity (the best GDP indicator) lifted 4 points to 1, while past employment lifted 1 point to -6. Pricing and cost expectations rose again, both up 3-4 points to the highest in a year or more. One-year-ahead inflation expectations rose 0.1% pt to 2.6%.

UNJUSTIFIED EXCESS PROFITS
The Commerce Commission released its final report on Auckland Airport’s 2022 – 2027 price setting, concluding the Airport’s forecast revenue is excessive by almost $200 mln, and its targeted returns are unreasonably high. But its forecast investment falls within a reasonable range, they say. AIA says they will discount future charges to meet the ComCom target return range.

NOW IN EFFECT
The FMA has licensed 77 financial institutions - 17 banks, 46 insurers and 14 non-bank deposit takers (credit unions, building societies and some finance companies) - under the new CoFI regime which goes into effect today, that is fundamentally about treating customers and potential customers fairly - that is. "the fair conduct principle". It is now a licensed institutions responsibility to make sure their processes are fair for customers.

VILLAGE ACCESS LOANS
Heartland Bank has launched a new loan specifically designed to bridge the move by the elderly from their own home into a retirement village. It will allow borrowing up to 50% of the value of the mortgaged home to finance the move to a retirement village. This can also help with associated expenses while living there. The loan is for a maximum term of three years and no regular repayments are required during this time so they can postpone the sale of their property to a more convenient time. The current interest rate for these loans is 9.59% as a variable interest rate which is the highest level of any real estate-backed loan we currently list. (But it is a bridging loan.) That is higher than their reverse mortgage rate of 8.59%.

FRICTIONLESS EUR RECEIPTS/PAYMENTS LAUNCHED HERE
International fintech Revolut, has launched a feature allowing New Zealanders to set up local EUR currency accounts to pay EU suppliers and receive EUR payments. It's the receiving EUR into a Revolut account that is new, so along with payments, frictionless payments and transfers like a local in Europe from a single account is now enabled. More currencies will be added later this year. Their claim is that there are both significant fee and fx rate savings.

NZX UPDATE
As at 3pm, the overall NZX50 index is down -0.6% but the weekly change up +0.7%, the year-to-date change down -6.5%, and the change from this time last year up +1.0%. The Warehouse, Oceania, a2 Milk, and Auckland Airport top the days gainers with Serko, Mainfreight, Stride Property, and Summerset leading the decliners.

BEST IN FIVE YEARS
We have updated the profile and annual results for Scales Corp (SCL, #37), to reflect their December 31, 2024 financial position. The $600 mln horticulture business has delivered a good profit recovery, their best since 2019..

WHAT IS THE RIGHT CAPITAL LEVEL
Under pressure from politicians who want easier access to bank loans, the Reserve Bank said it will review the capital requirements of banks and other deposit takers by year's end, by getting international experts to assess the current plan to have banks invest more capital. (Borrowers, especially rural borrowers, are seeking easier credit assessments.)

LENDING FOR RURAL BUSINESSES TURNS NEGATIVE
Overall lenders (banks and non-banks) pulled back their lending appetite to rural businesses in February, with the total loan book size falling -1.3% from a year ago, to $62.1 bln, its smallest since late 2022. In fact, we haven't seen a retreat like this since February 2022. The -$287 mln reduction in February 2025 from January extends the monthly trend lower to six consecutive months. In February 2024 lender increased their lending book by +$132 mln so that difference is a large -$419 mln. This will provide ammunition for the rural lobby in their anti-bank campaign - although it isn't clear that the pullback is by the main banks. There are plenty of others in this 'rural credit sector'. We actually won't know how much the main banks are part of this trend until the RBNZ Dashboard is out for March. (But the lobbyists probably won't wait for the evidence.) A big part of the reduction is the speed which dairy farmers are paying down debt, more than banks not lending. The lobby group wants more lending, but farmers are doing the opposite, at least dairy farmers are.

LENDING FOR HOUSING STAYS POSITIVE
The overall bank mortgage book rose by an outsized +4.4% in February from the same month a year ago, adding more than +$1.2 bln in the month. That its its fastest growth rate in two years. Some of that was at the expense on non-bank mortgage books because the overall expansion was +4.1% when you include them.

TD GROWTH TOPS OUT & STARTS SHRINKING
Households turned risk-averse in February, shifting out of term deposits and into short-term cash holdings. It is not as though total household bank account balances shrank; they didn't. They grew by +$259 mln from the prior month, up +$17.1 bln in a year. That was a better gain than in the year-ago February. But transaction account balances rose +$417 mln when the fell by more than that in February 2024, and savings account balances rose by +$324 mln in February 2025 from January (compared to a -$328 mln fall a year ago). It was the term deposit balances that were where we saw the big turn, down -$482 mln in the month. These TD balances are still $141.6 bln and still quite high. But the January-to-February fall is the first one we have seen in 42 months. A one-month change doesn't make a trend, but it is the largest non-pandemic fall for a February since these records have been available in 2016.

NOT MAKING MUCH SENSE
Yesterday the Minister of Finance said "Today I am announcing next steps in the Government’s mission to deliver better grocery prices for Kiwis." She then proceeded to announce yet another review of the sector. She also said "There will be no KiwiShop". Somehow they expect new competitors to enter the market, potentially having to invest $??? bln in stores and infrastructure into a market where the Government wants profits to fall. If such a company was listed on the NZX, would you invest in it? One way it might make sense for an outsider is if cheap product was sourced from outside New Zealand. Shoppers would be attracted, profits from the incumbents would fall, and the investor would get a good return. Pity the local suppliers, though.

WIDER ACCESS
The RBNZ is opening up access to its Exchange Settlement Account System, ESAS, the payments and settlement system used by banks and other approved financial organisations. This will be done in two phases for non-banks in an expedited process. First, to licensed non-bank deposit takers (NBDTs) in New Zealand, and secondly, to other entities that meet the access criteria. This may include payment service providers, overseas deposit takers and operators of designated Financial Market Infrastructures

FITCH REVISES ASB CREDIT RATING TO 'POSITIVE' FROM 'STABLE'
Credit rating agency Fitch has lifted the outlook on ASB's credit rating to positive from stable, and affirmed the rating at A+. This comes after it revised the AA- rating on ASB's parent Commonwealth Bank of Australia to positive from stable. Fitch describes ASB as a key and integral part of the CBA banking group.

"DEEP CONCERNS" ABOUT ASX MANAGEMENT
In Australia, the RBA and ASIC have taken "further steps" to address their increasing concern over the management of operational risk at ASX, following the CHESS batch settlement failure incident that occurred in late December 2024.

SWAP RATES HOLD
Wholesale swap rates are probably little-changed today at the short end, but lower for longer terms. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -1 bp at 3.61% on Friday. The Australian 10 year bond yield is down -11 bps at 4.41% today. The China 10 year bond rate is up +1 bp at 1.88%. The NZ Government 10 year bond rate is also down -11 bps at 4.60% while today's RBNZ fix was at 4.56% and down -12 bps. The UST 10yr yield is now just on 4.21% and down -4 bps from this morning. Their 2yr is lower at 3.87%, so that positive curve is now at +34 bps.

EQUITIES BEING DUMPED
The NZX50 is down -0.5% in late Monday trade. The ASX200 is down a much larger -1.5% in afternoon trade. Tokyo has opened down a massive -3.7% in early Monday trade. Hong Kong is down -0.2%, while Shanghai is unchanged at its open. Singapore has opened down -0.2%. On Wall Street, the S&P500 futures currently suggest that market will open little-changed from Friday, but that is a much less optimistic that the early signals.

OIL LOWER
The oil price is lower by between -50 USc and -$US1 from this morning's open and now just over US$69/bbl in the US, and just over US$72.50/bbl for the international Brent price.

CARBON PRICE TURNS BACK DOWN
The carbon price is down -$2/NZU today and back at NZ$57/NZU. The next official carbon auction is on Wednesday, June 18, with a $68 floor price. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD HITS NEW RECORD, AGAIN
In early Asian trade, gold is up +US$8 from this morning, now at US$3093/oz and another new record high.

NZD SOFTER AGAIN
The Kiwi dollar is down -10 bps from this morning at 57.1 USc. Against the Aussie we are down -10 bps at 90.8 AUc. Against the euro we are down -30 bps at 52.7 euro cents. This all means the TWI-5 is just under 66.7 and down a bit more than -10 bps from this morning's open.

BITCOIN STILL ON HOLD
The bitcoin price is down a mere -0.3% from this morning's open, now at US$82,014. Volatility of the past 24 hours has been modest at just on +/- 1.3%.

This soil moisture chart is animated here.

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