The finance minister of New Zealand has said that the government will look into whether competition is working well for consumers in the country’s financial sector.

Minister of finance Grant Robertson in a statement said that the government will examine profitability of banks in a market where four firms make up around 85 per cent of mortgage and other lending and 90 per cent of deposits.

All four of New Zealand’s top lenders are owned by Australia’s ‘Big Four’ banks: ANZ Bank New Zealand, ASB Bank, Bank of New Zealand, and Westpac New Zealand.

He said: "There have been long standing concerns that the market is not working well for New Zealanders. Banks have consistently made high profits over a number of years and their returns have outperformed their peers in other countries."

Robertson added that the global cost-of-living issues are informing this review, and that the government wants to set up a more competitive market: "There has not been an in-depth look into competition issues in New Zealand's banking for some time, and New Zealand lags other countries such as Australia and the UK into doing a detailed analysis into banking services.”

The probe will focus on whether barriers exist for new competitors entering or expanding in the market, along with consumers’ ability to switch banks and the introduction of innovative products. It will not examine the conduct of banks and culture.

Robertson said that the probe aims to be wrapped up by August 2024, with the government then to determine whether any action is necessary.

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