The Bank of New Zealand (BNZ) is expanding its TotalMoney product to small business customers in a move it says will save them a collective NZ$5 million a year.
TotalMoney, already available for home loan borrowers, lets customers offset the balance of their cheque and savings accounts against a floating home loan. BNZ says this can reduce the customer's effective interest rate.
BNZ director Andy Symons said benefits of Total Money for small business include earning maximum interest with funds between accounts, credit interest in transaction accounts, no cash handling fees, free alerts, online statements, and being able to simultaneously hold multiple accounts.
“We have identified that more than 6,000 of our current small business clients will be at least NZ$10 a month better off on TotalMoney, with around 10% of these NZ$100 better off a month,” said Symons.
"Small business sole-traders can also include their personal accounts as part of their TotalMoney package, giving them the ability to offset their mortgages against their business accounts."
Symons said BNZ had grown its share of the small and medium sized (SME) business banking market by 7% over the past 12 months to 22%, placing it second behind ANZ New Zealand, including the National Bank. BNZ wants to be New Zealand's most significant SME bank, Symons added, was listening to its customers, and he saw no reason to believe it wouldn't continue to grow its share of the SME banking market.
Meanwhile, BNZ also unveiled The Edge centre, an office facility in central Auckland available for BNZ small business customers to use at no charge. To be completed in mid-October, it'll feature video conferencing.
BNZ estimates small businesses comprise 87% of New Zealand's business sector, and normally have fewer than five staff and annual revenue of less than NZ$1 million.