KGC and Kiwibank would welcome more capital to challenge larger banks
Kiwibank's 100% shareholder Kiwi Group Capital Limited (KGC) and Kiwibank support today's announcement that the Government intends that Kiwibank has access to the capital it needs to further accelerate its growth and play an increasingly significant role in the banking sector and New Zealand economy.
KGC Chair, David McLean, says, “This is closely aligned with KGC's strategic objective to assist Kiwibank to carry out and develop its business. KGC will support the Treasury to undertake the preparatory work required by the Crown to understand what a private placement to suitable New Zealand institutions might look like.
“In considering capital raising options, KGC is committed to preserving Kiwibank's Purpose and Kiwi identity.”
Kiwibank has been successfully growing market share for some time, supported in part by $225 million of additional capital injected in July 2023 by KGC, funded from the proceeds of the sale of Kiwi Wealth to Fisher Funds in late 2022.
Kiwibank Chief Executive, Steve Jurkovich, says that Kiwibank is up for the challenge of taking on the larger banks and would welcome further access to capital over time.
“Kiwibank's faster than market growth shows that we are fulfilling our role as a competitive alternative to the larger banks and with more Kiwi choosing us momentum is on our side. We believe this reflects a clear preference among many Kiwi for a New Zealand-owned bank, whose earnings and profits are retained in Aotearoa.
“With access to additional sources of capital we can grow faster and create even more competition in the banking sector as we continue to deliver on our Purpose of Kiwi making Kiwi better off. We believe that can only be a good thing for our customers and New Zealand, both now and in the future.”
Kiwibank is currently focused on a multi-year transformation aimed at delivering more scalable systems to further accelerate growth. Any future capital investment would need to consider the timing of this transformation to maximise value.
Ultimately, any decision around capital, and the sources of that capital, sits with KGC and the Crown as the 100% shareholder of KGC.
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