Which banks pass on OCR changes first?
The Financial Markets Authority surveyed eight New Zealand banks covering 98% of housing loans to assess how quickly they pass Official Cash Rate (OCR) changes to borrowers and savers. During OCR cuts last year, Kiwibank passed 100% to on-call savings, TSB ~95%, ANZ 30%, Westpac 50%, Co-operative 58%, ASB 62%. In July OCR hikes, Kiwibank and TSB passed the full increase; others passed partial amounts.
How this was made
The 30-second read
Why it matters
The dataset highlights which banks transmit OCR cuts and lifts more quickly to savings and mortgage rates, potentially affecting perceived margin resilience and reputational risk.
Market read
Traders may use the pass-through asymmetry as a lens for relative NZ bank margin and customer-switching risk, but the article lacks new financial or regulatory actions.
What to watch
The article notes OCR is only part of bank funding; fixed-mortgage pricing and swap spreads are cited as the “real game,” which is not quantified here.
Background
The Financial Markets Authority requested pass-through information from eight NZ financial institutions covering how products moved with OCR changes.
Ticker impact
ASB passed on 62% of OCR cuts to on-call savings and passed on 15 basis points of the 25bp July lift.
Low tradability; could matter for relative comparisons if investors focus on asymmetric treatment.
No new bank-specific event beyond the FMA dataset is disclosed.
Market effects
Raises the market’s focus on net interest margin sensitivity to OCR pass-through speed and potential asymmetric treatment of borrowers versus savers.
Relevant primarily to New Zealand retail banking expectations around OCR transmission and customer switching behavior.
Limited, since the dataset is specific to New Zealand’s OCR and local funding mix.
Counterpoint
Faster pass-through to savers may simply reflect funding mix differences, not a structural margin advantage or disadvantage, so the data may not translate into investable mispricing.
Key entities
- regulatorFinancial Markets Authority (FMA)
Published new data on how quickly banks passed OCR changes to borrowers and savers.
- bankKiwibank
Reported to pass through 100% of OCR cuts to on-call savings and the full July increase.
- bankTSB
Reported to pass through about 95% of OCR cuts and the whole July increase.
- bankANZ
Reported to pass through about 30% of OCR cuts to on-call savings.
- bankWestpac
Reported to pass through about 50% of OCR cuts to on-call savings.
