Non-bank lending institutions
Non-bank lending institutions (NBLIs) include non-bank deposit taking institutions (NBDTs) and non-deposit taking finance companies. The Reserve Bank of New Zealand regulates NBDTs, but does not regulate or supervise non-deposit taking finance companies. NBLIs account for under 3 percent of intermediated credit, mainly focusing on the business and consumer sectors (figure 8).
Figure 8: NBLI lending by sector (February years)
Source: RBNZ Non-Bank Deposit Taker Prudential Return (NBDTPR), RBNZ Standard Statistical Return (SSR).
Note: Excludes assets of deposit-taking finance companies in receivership or moratorium. In the period shown on the chart, several large NBLIs left the sector and became banks.
NBDTs are entities that offer debt securities to the public (as defined in the Securities Act 1978) and carry out the business of borrowing and lending money, or providing financial services, or both. However, they do not include registered banks. There are currently 20 licensed NBDTs operating in New Zealand. As at February 2021 the total assets of NBDTs is $2.75 billion, of which $1.13 billion is in building societies and $1.13 billion is in credit unions.1
1 A list of licensed NBDTs can be found on our Public register of licensed NBDTs.
The New Zealand private insurance sector is small by international standards. There are around 86 licensed insurers currently operating in New Zealand, accounting for approximately $32 billion in assets or 13 percent of GDP.1 2
Financial market infrastructures (FMIs) provide channels through which payments, securities, derivatives or other financial transactions are cleared, settled or recorded. Well-functioning and efficient FMIs play a critical role in promoting financial stability and economic growth. FMIs can strengthen the markets they serve; however, if not managed properly, they can pose significant risks to the financial system and be a potential conduit or source of contagion. A stable financial system therefore depends on careful management and mitigation of the key risks for FMIs.
The banking system comprises the majority of lending to the non-financial private sector in New Zealand. Direct capital market funding (issuance of corporate bonds) and non-bank lending institutions (NBLIs) together account for only 6 percent of non-financial private sector borrowing.
The Reserve Bank regulates banks, insurers, and non-bank deposit takers (NBDT), for the purpose of promoting the maintenance of a sound and efficient financial system. The Bank’s approach to prudential supervision is described in our Statements of supervisory and enforcement approaches. The Bank has no responsibility for non-deposit taking non-bank lending institutions (NBLI) or unlicensed insurers. The Reserve Bank also oversees and operates New Zealand’s financial market infrastructures.