Heartland says big banks use scale to block competition

For example, “mortgage brokers help ensure homeowners are aware of home loan options available to them, including from smaller banks like Heartland,” the bank, which is owned by the NZX-listed Heartland Group, says in its submission to the Commerce Commission's inquiry into competition in personal banking services.

“But bank-to-broker mortgage incentive structures possibly distort that picture in favour of larger banks who have the scale to cover the initial cash outlay that is required when paying broker fees,” the submission says.

Similarly, some banks offer customers cashbacks with an associated clawback period.

“These cashbacks can have a similar distorting impact to mortgage broker incentives due to also requiring an initial cash outlay which favours larger banks who have the scale to cover this outlay,” it says.