The biggest user of the Reserve Bank's controversial Funding for Lending Programme

Also revealed is what banks used the FLP money for

The biggest user of the Reserve Bank's controversial Funding for Lending Programme

ASB has borrowed the most public money on offer via the Reserve Bank’s controversial and ongoing Funding for Lending Programme.

Introduced in December 2020, FLP aimed to provide additional monetary stimulus to the economy to help the central bank meet its consumer price inflation and employment monetary policy remits by reducing banks’ funding costs and lowering their borrowers' interest rates. 

Read more: Banks have tapped $8 billion so far from RBNZ's funding programme

The three-year FLP funding is available to banks over a two-year period running until Dec. 6 this year, allowing those eligible to borrow directly from RBNZ at the OCR with the borrowing rate adjusting over the term of the transaction if the OCR changes.

Banks have borrowed $12.66 billion via the FLP, according to recent figures from RBNZ as of July 18, with ASB borrowing the most funds, at $3.8 billion, while BNZ borrowed $2.1 billion, ANZ $1.75 billion, and Kiwibank $1.1 billion, reported.

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Westpac doesn’t comment on FLP drawdowns, a spokeswoman said, but the bank’s latest general disclosure statement showed that, as of March 31, it had accessed $2 billion through the FLP.

Among smaller banks, The Co-operative Bank has tapped $120 million in FLP money, and SBS Bank has borrowed $164 million, with an SBS spokeswoman saying this was “in line with the bank’s allocation to date.”

TSB has not accessed the FLP and has no plans to do so, a spokeswoman said. said the seven banks, in total, have borrowed at least $11.034 billion and it was possible that the balance of $1.626 billion, or the bulk of it, has been sourced by Westpac since March 31.

When asked how they’ve used the money they’ve obtained via the FLP, an ASB spokeswoman said the bank is putting it “towards supporting lending for productive and sustainable purposes to benefit all New Zealanders.” This includes low-cost loans for new builds, lending to large businesses investing in infrastructure and sustainability projects, and low-cost rural sustainability lending for farmers making environmental upgrades, she said.

According to ANZ, the money has been used “to meet the bank’s general funding requirements.”

A BNZ spokesman said the bank has “run its ‘Good to Grow’ low-cost lending programme for businesses, supporting many customers through the pandemic to invest, grow, and drive digital and sustainable change to take advantage of new consumer behaviours.”

“We’ve also made drawdowns as a prudent measure to secure funding and support our customers in the face of ongoing uncertainty and volatility in global markets, particularly with the war in Ukraine and inflation spiking in many key economies around the world,” the BNZ spokesman said.

Kiwibank, meanwhile, used the money “for general lending purposes,” Co-operative Bank “to fund lending growth including lending to first-home buyers,” and SBS Bank “to provide additional support to first-home buyers,” their respective spokespersons told