Generous or ‘stingy’? Banks ramp up cyclone relief and donations, but still cop criticism

ASB and Bank of New Zealand are tracking as the banks with the most generous cyclone relief and donation packages.

And on Wednesday, ANZ plans to announce a $3 million​ cash donation package targeted to a number of organisations supporting people affected by Cyclone Gabrielle.

But the banks’ cyclone relief efforts have been slammed as “stingy” by Sam Stubbs, chief executive of KiwiSaver provider Simplicity, which has donated $300,000 to cyclone relief work.

When Coromandel was hit by Cyclone Hale in early January, followed by flooding in Auckland, the banks responded with emergency relief packages offering customers things like emergency overdrafts, and the ability to temporarily reduce or defer mortgage repayments.

READ MORE:
* BNZ unveils $1 billion low-rate cyclone recovery loan fund
* BNZ last of the big banks to offer interest-free emergency loans to cyclone victims
* ANZ latest bank to offer interest-free overdrafts to flood/cyclone victims, while ASB will charge just 0.01%

But the sheer scale of the impact of Cyclone Gabrielle has prompted banks to go further than they did with the relief packages they offered during the fear-filled early days of Covid lockdowns, when many worried they would lose their jobs.

ASB has pledged to give away up to $5m including $3m in $2000 grants to people whose homes have been red or yellow-stickered, and people whose small businesses have been hard-hit, and $2m to the Red Cross New Zealand Disaster Fund.

Now BNZ has donated $250,000 to The Salvation Army’s cyclone appeal, and set up a $1 billion low-interest loan for businesses.

But Stubbs said the combined efforts of the banks represented a measly effort.

He said the banks made super-profits, had an effective financial underwrite from the taxpayer, and had received massive financial support from the Reserve Bank Te Pa Matua.

He said ASB’s $5m in donations was equivalent to just 18 hours of profits.

The $300,000 Simplicity had donated to cyclone relief through food banks represented about 1.5% of its revenue, he said.

“We basically just cleaned out the bank accounts.”

Stubbs challenged the big banks to donate 1% of their profits to cyclone relief.

“You have to ask yourself, ‘when is the exceptional time they should dip into their pockets?’ Arguably it’s now, after the largest natural disaster in living memory,” he said.

That would equate to about $50m, he said.

Banks have been ramping up their support packages for people and businesses affected by the cyclone.

Last week Westpac started a cascade of banks moving to offer zero-interest overdrafts to customers hit hard by the flooding and cyclones. TSB was also offering $500 interest-free emergency loans to cyclone victims.

That was followed by Kiwibank, ANZ, and BNZ all following suit in the following days, with ASB offering 0.01% emergency overdrafts, as its systems were unable to cope with zero interest.

The interest-free overdrafts were a new element to bank relief packages, advancing them beyond those which they offered to people during the early days of the Covid-19 pandemic, when it was feared many would lose their jobs during lockdowns.

ASB came out with its $2000 ex-gratia payments fund for people whose homes were red and yellow-stickered on February 15, the day before it reported an after-tax profit of $840m in the last six months of 2022, up 10% compared to the same period the year before.

As banks develop their cyclone relief and donation packages, they have been working to restore banking services in places hit by the cyclone, including keeping ATMs working and stocked with cash.

ASB said it was the first bank to get branches open again in Hastings, Napier and Gisborne.

The Reserve Bank is working with banks, police, and the New Zealand Defence Force to ensure cash is available in areas hit by the cyclone.

Telecommunications companies have restored communication to almost all areas that were cut off by the cyclone.

Paul Brislen, chief executive of the Telecommunications Forum said between Spark, Vodafone, and 2degrees there were now just 25 cell towers yet to be brought back into operation.

Telecoms companies had prioritised fibre connections for banks and schools, he said.