National Backs Plan for Private Investors to Take Stake in Kiwibank
The National Party has reiterated its intention to grow Kiwibank by allowing private local investors to take a stake in the state-owned bank. This move would enable Kiwibank to compete more effectively with the big Australian banks, which dominate New Zealand's banking sector.
National's finance spokesperson Nicola Willis described this approach as a 'win-win solution', stating that it would not only benefit Kiwi businesses but also provide local investors with a share in Kiwibank's growth. Last year, the government gave the green light for Kiwibank to engage with local investors, including KiwiSaver providers and Māori institutions.
However, Kiwibank's parent company, Kiwi Group Capital, scrapped the plan after discovering that changes in Reserve Bank capital requirements had given it access to an additional $400m in capital. Nicola Willis acknowledged this assistance but argued that more capital would be needed for Kiwibank to continue its growth.
New Zealand's banking sector is highly concentrated, with the big four Australian-owned banks controlling around 85% of the market, leaving Kiwibank with a share of just over 6%. Any move by Kiwi Group Capital to accept outside investment would dilute the government's ownership of Kiwibank.
Labour and New Zealand First have expressed concerns about this proposal, with Labour describing it as partial privatisation and New Zealand First leader Winston Peters opposing any sale. However, Nicola Willis reassured that safeguards would be put in place to ensure that Kiwibank remains a Kiwi bank.