6 Jun 2012

Cooks interest rates reflect local risks, says NZ banker

2:05 pm on 6 June 2012

A New Zealand banker says Cook Islands interest rates are high because the state of the economy and the structure of the local banking system mean local banks have to cover additional risks.

Sam Knowles, who previously headed Kiwi Bank in New Zealand, is part way through a review of banking services at the request of the Cook Islands government.

He says local banks are performing reasonably well compared with other South Pacific banks but the high interest rates have to do with cost of doing business, not with high profits.

Mr Knowles says interest rates remain high primarily because banks have a significant amount of distressed debt - that is, properties they can't sell.