There has been another increase in profits for New Zealand banks, but there are tougher times ahead for them.
KPMG's quarterly Financial Institutions Performance Survey (FIPS) shows the banks made a collective net profit of $1.249 billion in the first three months of this year.
That is an increase in net profit of $98 million, or 8.55 percent.
It is not quite the record profit of $1.254 billion the banks made back in the September quarter but it is 8 percent up on the December quarter. KPMG says the profits were achieved despite increased competition in the mortgage market.
The net interest margin fell slightly to 2.29 percent as the banks fought for market share, but they offset that with increased earnings from other areas and from cost cutting.
A big concern now for the banks is the fall in global dairy prices. This could leave many farmers struggling to cover their loans. It will also impact businesses that rely on the dairy sector -that ranges from the suppliers of fertiliser and farm equipment through to builders and car dealers.
The profits for the big four banks:
ANZ - $452 million + $27 million)
BNZ - $ 270 million (+$38 million)
Westpac - $247 million (+$3 million)
Commonwealth Bank of Australia (ASB) - $218 million (+ $4 million)
New Zealand's largest bank, Kiwibank, made $29 million for the quarter. That is a fall in net profit of $7 million, or 19 percent.
There is another Fonterra Global Dairy Trade auction tomorrow morning.
This will be watched closely because it is looking increasingly likely Fonterra will have to lower its forecast payout to farmers for the new season, perhaps before the end of the month.
This week BNZ lowered its forecast for the payout to $4.70 per kilogram of milk solids from $5.20. This compares with Fonterra's current forecast of $5.25.
The bank's analysts said, "The signs are still not good, especially after the recent ructions in financial and commodity markets, and China's prominence in them. It all adds more downward pressure to a market suffering the perfect storm of ongoing supply expansion, soft demand, and trade embargoes."
Computers trade at high speed in fractions of a second these days, so imagine the effect of computers and humans trading for 15 minutes with information that turns out to be false.
That is what happened today with US investors buying and selling Twitter shares.
Shares in Twitter leapt 5 percent after a fake news report emerged that said the social site was a takeover target.
The fake report appeared to be from Bloomberg.
It wasn't. But in the 15 minutes it took for the report to be discredited, the company's share price rose from US$36.90 to US$38.82.
The report appeared on a web page that looked almost like the real Bloomberg website.
The fake report said Twitter "is working closely with bankers after receiving an offer to be bought out for US$31 billion."
Once investors realised the report was fake the share price returned to where it started.
Bloomberg is reporting the web page was registered in Panama.
Twitter shares rose 2.63 percent for the day to US$36.72, but are well down from the US$53 they were trading for in April.
The social messaging platform is hugely popular but investors are worried about the company's ability to turn that success into profits.
The prospect of more oil flooding onto world markets would normally drive prices down but today crude oil prices rose, despite confirmation that Iran is going to be allowed to resume exporting oil.
The Iran news followed the signing of a landmark deal that will prevent Iran from producing weapons-grade plutonium.
US crude rose 62 US cents, or 1.19 percent, to US$52.82 a barrel.
Brent crude futures rose US56 cents, or one percent, to US$58.40.
The markets have been concerned for weeks about the impact of oil coming onto the market from Iran. But it looks like the concern got ahead of the reality. Traders are now realising that it will be some time before the oil from Iran starts flowing.
The New Zealand dollar is trading at 67.07 US cents, up from 66.97 yesterday morning.
It is at 90.04 Australian cents, from 90.30.
The Kiwi is trading at 42.90 British pence, down from 43.22.
It is 60.95 Euro, up from 60.82 yesterday.
The European share markets were up as the Greek parliament debates a proposed bailout deal from the Eurozone.
Wall Street posted a fourth day of gains, with the Dow gaining 0.42 percent, the S&P500 0.45 percent and the Nasdaq 0.66 percent.