Wellington, Oct 22 NZPA - The Bank of New Zealand's $657 million annual profit has triggered a renewed call for closer scrutiny of bank lending policies from Finsec, the finance workers union.

The union has previously expressed concern about incentives for bank workers to push debt to customers.

A day after BNZ reported an increase in profit Finsec called for regulations to promote ethical lending in exchange for a scheme guaranteeing wholesale bank borrowing.

The Government has so far only agreed to guarantee retail bank deposits but is under pressure to match Australia with a wholesale guarantee protecting the transactions banks do in global markets where they seek funding.

"If the BNZ and other banks want the taxpayer to underwrite their borrowing, then customers need and deserve guarantees that their lending practices will be fair and ethical," said Finsec campaigns director Andrew Campbell.

He said banks had to change lending behaviour during the rough economic times the country was in.

The BNZ has increased its referrals targets for tellers by 50 percent and for customer service officers by 66.6 percent.

"This means BNZ customers will be coming under more pressure to get into debt or take on other bank products," said Mr Campbell.

The BNZ said yesterday it had a conservative approach to lending.

Including one-off gains and accounting adjustments, BNZ's net profit for the year ended September was up 15 percent to $785m. Cash earnings rose 12 percent to $482m.

Customer deposits were up 7 percent to $25.9 billion. Lending volumes were up 10.2 percent at $52b.

BNZ's parent National Australia Bank reported a 0.9 percent fall in reported annual net profit to $A4.54b ($NZ5.16b).

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