- Hon Nicola Willis
Kiwibank has been given the green light to compete more vigorously with the big four Australian-owned banks that dominate the New Zealand banking sector.
Finance Minister Nicola Willis announced today that, following a market testing process, Cabinet had approved Kiwibank's parent company raising up to $500 million of capital to fund the bank's growth.
"Allowing Kiwibank to raise up to an additional $500 million is the first step towards giving Kiwibank access to the capital it needs to truly compete with the big four Aussie banks while retaining its intrinsic New Zealand identity.
"The Commerce Commission reported last year that New Zealand's four largest banks did not face strong competition when providing personal banking services.
"Advice to the Government is that an additional $500 million of capital could support up to $4 billion of business lending or $10 billion of home lending.
"To assess interest in Kiwibank, Kiwi Group Capital (KGC) engaged with New Zealand KiwiSaver funds, investment institutions and professional investor groups including Māori institutions.
"KGC has advised there is sufficient interest from professional New Zealand investors groups to proceed."
Nicola Willis says a future government may choose to publicly list Kiwibank on the stock market, but that won't occur without an electoral mandate.
Irrespective of any future decisions, the Government has approved measures to safeguard the bank's New Zealand identity.
ese measures include maintaining at least 51 per cent government ownership of KGC for the foreseeable future and, through a Kiwi Share to be held by the Crown, requiring, among other measures:
- a majority of the directors of KGC to be normally resident in New Zealand; and
- Kiwibank maintaining its principal place of business in New Zealand.
KGC has until 30 June 2026 to complete a capital raise, subject to final approval of terms and conditions from shareholding Ministers.
