(Bloomberg) -- New Zealand’s investigation into personal banking services will focus on home lending and deposit accounts, according to a preliminary report by the Commerce Commission.

The study is centered on the areas that will be most relevant to most people, which is why deposit accounts and home loans are proposed as key focus areas, Commission Chair John Small said Thursday in Wellington. Other personal banking services, like insurance, may be considered to the extent they are tied to or bundled together with deposit accounts and home loans.

Finance Minister Grant Robertson announced the inquiry in June amid suggestions that lenders are making excessive profits. The government was concerned that the market, which is dominated by four Australian-owned banks, is not working well for New Zealanders who are facing an increasing cost of living.

“Our initial review of existing research shows that our banks are more profitable than in comparable economies over the past decade, and this raises questions for us,” Small said. “We want to understand whether lack of competition in personal banking is a contributing factor. This is important in the context of our study as profitability can serve as an indicator of the intensity of competition.”

The study will look at how the competitive process is working and ask whether customers are being well served, how easy it is for them to swap providers and whether there are barriers to innovation, he said. 

New Zealand Announces Banking Inquiry Amid Profit Concerns

It will also ask whether bank profits are consistently high and, if so, whether the level of competition can be ruled out as a contributing factor.

“If competition is working well in the sector, we’ll see the benefit to consumers through the quality and range of products available, fees, interest and charges and the services offered,” Small said. 

The Commission is seeking feedback on its preliminary issues report by Sept. 7. 

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