ANZ and Westpac shed ATMs as RBNZ cash mandate looms

RBNZ estimates the incremental bank operating cost at about $104 million a year. That is roughly 1 percent of combined pre-tax profits of more than $10 billion. KPMG’s FIPS Review of Banks 2024 put sector net profit after tax at $7.22 billion.

If banks fully passed the $104 million into lending margins on about $570 billion of net loans, the average hit would be about 1.8 basis points. On a $500,000 mortgage that is about $90 a year, or roughly $3.50 a fortnight, before any competitive offset.

RBNZ values societal benefits of adequate cash services at $2.83 billion a year in its consultation materials. Director of Money and Cash Ian Woolford said banks must provide free cash services because cash is essential to the customer relationship.

We believe banks must provide cash services to customers, free-of-charge, because cash is an essential part of a customer’s relationship with their bank

Woolford said that when consultation opened in February 2026.

Beaumont rejected the scale of the plan for NZBA members ANZ, ASB, BNZ, Westpac and Kiwibank.

Banks agree that cash use should be preserved for those customers who need it, but this proposal is extreme. This is a back to the future solution

Demanding the provision of 3000 more branches and ATMs when there simply isn’t the need for them will ultimately increase the cost of banking for all New Zealanders.

He said banks had stopped regional branch closures for almost six years and pointed to hub trials, mobile branches and community bankers.

The New Zealand Initiative’s Eric Crampton has argued the multi-bank density target is overkill, questioned whether existing Deposit Takers Act powers cleanly authorise it, and preferred smarter deposit-capable ATMs, switching incentives or taxpayer funding if the benefit is social.

FinCap has supported free minimum access, citing rural travel costs and disability and budgeting needs among lower-income clients. RBNZ cites survey material showing more than 80 percent of adults use cash sometimes, about 8 percent rely on it as their sole payment method, and Xero research that 72 percent of small businesses would be adversely affected if cash vanished.

Australia shows a steeper cull. Canstar’s reading of APRA Points of Presence data to 30 June 2025 put bank ATMs at 5,143, down 6 percent year-on-year and 47 percent since 2020. Bank branches were down 33 percent over five years.

For New Zealand households the channel is direct. Every free bank ATM replaced by a private machine converts a no-fee withdrawal into a $2.50-plus charge. Cash-reliant users — often older, rural, disabled or budgeting with notes — wear that cost. Digital urban customers largely do not.

For the five large banks the question is operating expense, franchise duty and pass-through into mortgage and SME pricing. Shared hubs lower the bill. Solo branded networks inflate it. Either way the cost lands in the P&L and competes with capital, digital spend and competition scrutiny.

RBNZ’s late-September findings will set the next fork: a denser free cash utility funded by banks, a lighter voluntary footprint, or a push toward legislation. Mortgage holders and depositors will pay attention to who funds residual cash access — and at what spread.