About our financial system
The banking sector dominates the New Zealand financial system, with the largest share of overall assets, as shown in figure 1. In March 2022, banks had total assets of just over $667 billion.
Capital markets, places where savings and investments are channelled between suppliers with capital (financial assets) and those who need capital, are relatively less developed than the banking sector in New Zealand. The total market capitalisation undefined of equities at the New Zealand Stock Exchange is valued at around $167 billion.
The domestic (New Zealand-based) bond market is around $171 billion (excluding government debt).
The managed fund industry is also small compared to banks, with around $200 billion of assets under management.
We regulate non-bank deposit takers which include building societies, credit unions and finance companies that take deposits from the public. They make up $3 billion of the Non-bank lending institutions' $18 billion.
Total assets are not yet available on a consistent basis for the insurance sector. The value of $83 billion is derived from individual insurer financial statements up to June 2020. Asset values may be accounted for differently across insurers.
Figure 1: Financial institutions' total assets (as at 31 March 2022)
Figure 1 is a flowchart showing the total assets owned by financial institutions as at 31 March 2022. Financial institutions is in the first column, with registered banks, insurance companies, non-bank lending institutions and other financial institutions, all in the second column, to the right of financial institutions. Registered banks have a total of $667 billion in assets. Insurance companies have a total of $83 billion in assets. Non-bank lending institutions have a total of $21 billion in assets. Other financial institutions have a total of $2 billion in assets.
Registered banks and insurance companies are regulated and supervised by the Reserve Bank. Other financial institutions are not regulated or supervised by the Reserve Bank.
In the third column below registered banks, locally incorporated banks have $625 billion in assets, and branches have $41 billion in assets. Both of these make up the total assets held by registered banks, and are regulated and supervised by the Reserve Bank.
Below insurance companies, there are licensed insurers and unlicensed insurers. Licensed insurers are regulated and supervised by the Reserve Bank, and have $27 billion in assets. Unlicensed insurers are not regulated or supervised by the Reserve Bank and hold $56 billion in assets.
Below non-bank lending institutions are non-bank deposit takers and non-deposit taking finance companies. Non-bank deposit takers are regulated by the Reserve Bank and hold $3 billion in assets. Non-deposit taking finance companies are not regulated or supervised by the Reserve Bank, and have $18 billion in assets.
Note, the numbers in this figure may not sum correctly due to rounding.