Steve Jurkovich: Kiwibank CEO on the the bank cutting their advertised rates after yesterday's OCR cut

Most banks have cut their advertised rates following yesterday's OCR decision. 

The Reserve Bank cut the Official Cash Rate by 25-basis points, going from 2.5% to 2.25%. 

Kiwibank was the first to move. 

Chief Executive Steve Jurkovich told Mike Hosking it's a positive sign of things to come, with their team now forecasting a steady period of cuts from now to June 2027. 

He said that people are unlikely to get carried away with the cuts, rushing out and buying new houses, cars, or technology. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Adrian Or did his best no surprises here routine. Yesterday
is one, he did the right thing by cutting the
ocr but two gave no indication previously that yesterday was
anything close to being the day he was actually going
to do it. Meantime, most of the retail banks were
screaming for him to pull the trigger. So twenty five
points it was. In the end. QUI Banks chief executive
Steve Yukovich back with us. Steve, very good morning to you.
So you and Jared have led the way on this.

(00:21):
Do you feel justified or vindicated?

Speaker 2 (00:24):
Oh? Look, I just I think so in a sense,
but also probably much more importantly, I'm just a big
fanner than the mentim it can create around being a
bit more positive about the outlook, and I think the
most important things what's to come now. And so our
team are pretty convinced that we're in for a very
extended period of cuts, Mike, So cutting from now till
June twenty seven. So twelve to twenty five point cuts

(00:47):
in a row is what the international and wholesale markets
are saying. So thankfully twenty four will be behind us
and twenty five will be better.

Speaker 1 (00:57):
Right, So we got there in the end, But what
about the trust equation with the Reserve Bank. If you
have no idea what they're doing, it's certainly.

Speaker 2 (01:05):
A one eighty degree from may I think everyone would
argue that's the case. I think they argue that they're
sort of the data that they get more regularly, like
card data and what's been spent in hospitality and things
sort of force their hand a little bit. I guess
my perspective is that information has been around for a
long time. I've heard you talk about it on the show.
You know, you only need to go out for dinner,

(01:26):
we'll have a look around as far as people spending,
so what they called high frequency data, I think it
had been around for a while. But the important thing is,
I mean they've got to be sure and they recognize
that they needed to change. So while it's a one eighty,
it's still the right decision.

Speaker 1 (01:41):
Is he looking through anything because the non tradable inflation
isn't within the band, probably won't be within the band.
Is that potentially trouble or not?

Speaker 2 (01:50):
Yeah? I think I think it's a very good point
because some of the things that are really stubborn, like
you know rates, you're seeing councils, steel jack up rates,
utilities and insurance are still very high. You know. My
argument would be that sort of provides maybe two percent
of the inflation, So that stuff is very very stubborn
and not going to move. I think it's everything else
that's creating this sort of downward pressure that is buying

(02:12):
in or that well, I should say that the Committee
is buying into, of course, because it's not just adread.

Speaker 1 (02:16):
No exactly your sense of whether we get carried away
with this's not just the twenty five points, but as
you say, all the cuts still to come and we go,
wa here we go, let's buy some houses. Is that
a concern?

Speaker 2 (02:27):
I don't think so, because a lot of the capacity
that people had to get excited about and rush out
and do things is often driven off the New Zealand,
in particular, off the perceived increase in value of their house,
even though if they hadn't sold it. So I think
that return in the property market's still going to be
pretty moderate. So I don't think there's going to whole
lot of people going out and gearing up their house

(02:49):
to buy new cars and new tellies and things. I
think people have used up a lot of that capacity
over the last couple of years, and so I think
people's response is going to be reason moderate, but it
certainly should be more confident than it was right.

Speaker 1 (03:03):
To having on the programs always Steve Yukovic, who is
the the key we Bank CEO. For more from the
Mic Asking Breakfast, listen live to news talks. It'd be
from six am weekdays, or follow the podcast on iHeartRadio.