Kiwibank and KGC support government plans for increased capital
Kiwibank and its sole shareholder, Kiwi Group Capital (KGC), have welcomed the government’s announcement to ensure Kiwibank has access to the capital it needs to expand its role in New Zealand's banking sector and economy.
The move aligns with KGC’s strategic goal of enabling Kiwibank to grow its business and compete more effectively against larger banks.
KGC chair David McLean (pictured above left) expressed support for the Treasury’s preparations to explore capital-raising options, such as private placements with suitable New Zealand-based institutions.
“This is closely aligned with KGC's strategic objective to assist Kiwibank to carry out and develop its business,” McLean said. “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.”
McLean emphasised that maintaining Kiwibank’s purpose and Kiwi identity remains a priority when considering new capital sources.
A competitive challenger to larger banks
Kiwibank chief executive Steve Jurkovich (pictured above right) highlighted the bank's consistent growth and readiness to take on larger competitors, especially with further access to capital.
“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,” Jurkovich said.
He said that Kiwibank’s growth reflects a clear preference among New Zealanders for a locally owned bank, with profits retained in the country.
“With access to additional sources of capital we can grow faster and create even more competition in the banking sector... That can only be a good thing for our customers and New Zealand, both now and in the future,” Jurkovich said.
Kiwibank’s recent growth has been supported by $225 million of capital injected by KGC in July 2023. This investment came from the proceeds of Kiwi Wealth’s sale to Fisher Funds in 2022.
Focused on transformational growth
Kiwibank is currently undergoing a multi-year transformation to upgrade its systems and scale operations. Any future capital decisions will consider the progress and timing of this transformation to ensure maximum value is achieved.
Jurkovich reiterated the bank’s commitment to accelerating growth while delivering on its purpose of making “Kiwi better off.”
Next steps sit with KGC and the Crown
Ultimately, decisions regarding capital and its sources remain with KGC and the Crown, which owns KGC.
The Treasury’s upcoming preparatory work will provide insights into how private investment might support Kiwibank’s ambitions.
As a growing challenger to New Zealand’s largest banks, Kiwibank sees additional capital as a means to deliver more competition, benefiting both customers and the wider economy.
Read the Kiwibank media release here.
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