Iran war impacts will make coming months ‘a bit of a grind’ for Kiwis, says ANZ boss
Saturday, 2 May 2026
New Zealanders will face a tough time for the rest of the year, ANZ bank chief executive Antonia Watson says.
Speaking on Friday after announcing a $1.23 billion profit for the six-month period to the end of March, Watson was expecting a gruelling end to the bank’s financial year, which ends on September 30.
“The second half's going to be a bit more of a grind. Some of the delayed impacts of fuel prices, and inflation, and all those sorts of things, will start to trickle through,” she said.
“I think it's going to be a tougher half for our customers.”
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The bank does scenario planning when it sets its strategies. Its base case is for weak economic growth, and relatively modest increases in unemployment.
But its shareholder presentation also includes a “severe” scenario of things getting much worse in the Middle East, and in the global economy.
In that scenario, which the bank did not consider likely, the true dependence of New Zealand’s economic fortunes on the health of the global economy is made clear.
It has GDP dropping into recessionary territory, unemployment rising to 10.7% in 2027, and house prices dropping 42.6% below their 2021 peak.
After high home loan rates in 2024 and 2025 during the Reserve Bank’s battle against inflation driven by Government spending and disrupted global supply chains, many households got serious about their home loans.
And when interest rates fell, they continued making payments as if home loan rates remained high.
Those who were able to do that built buffers.
“Most of our customers are paying a rate that begins with a four at the moment. It's feeling a lot easier on people, and they're rebuilding their buffers,” Watson said.
But since US president Donald Trump started his war in the Middle East, Watson said “a sense of resignation” had set in among customers that there was going to be prolonged economic pain.
“That's a real shame,” she said.
“Confidence is everything really. It's confidence to invest, and confidence to buy a new home, and all those types of things which have been dampened,” she said.
“It's probably the last thing we needed as a country just as things were starting to look a little bit better.”
ANZ has lifted provisioning on loans, but as data from credit reporting company Centrix showed, most people are managing their loans.
The increases in ANZ’s provisioning were small, however.
The bank reported modest increases in lending,
However, Centrix data showed demand for loans has been “softening” following petrol price rises prompted by Trump’s war.
And, Centrix reported, that arrears remained stubbornly high with 459,000 people behind on at least one credit account (loans, power bills, telecoms bills, etc) at the end of March, with 95,000 of them in the disaster zone of being behind by three months or more.
ANZ said it was now one of only 12 banks globally to have an AA or better rating from all three major credit rating agencies: Moody’s, Fitch and Standard & Poor’s.
Watson said the bank was progressing well with a huge technology project to shift from a 35-year-old core banking system to a modern cloud-based system that would unleash its ability to deliver more modern tech-based services to customers.
Earlier in the week, ANZ was one of four big banks to sign up to a Visa project to develop “agentic AI” payments.
“What that really means is that our customers can use an AI agent to say, ‘I'm looking for a blue shirt … can you help me find some options?’ and then at a point in time when the options are served up, we'd be able to offer a payment option there,” Watson said.
One day, there might come a time when people shopped by asking AI agents to make all the decisions, she said.
“You might say just go and buy me a blue shirt, and the whole payment process might be seamless.”
AI was going to play a huge role in transforming the bank, the ASX shareholder presentation said, including the automation of banking functions currently done by humans.
ANZ in Australia had been stripping out jobs, and reported it was 78% of the way through a downsizing that would take 3500 people out of its Australian workforce.
What would AI mean for the workforce?
“Over time workforce composition will change, but as I say, it's still important for us to have a human in the loop,” Watson said.
Some jobs would go, but she said: “There's going to be jobs created as well.”