Ownership shake-up may be afoot at Kiwibank's parent company, Kiwi Group Holdings

An ownership shake-up may be afoot at Kiwi Group Holdings, Kiwibank's parent company.

Kiwi Group Holdings is currently owned by New Zealand Post, the Accident Compensation Corporation and the NZ Superannuation Fund after ACC and the Super Fund bought in back in 2016.

"In 2016 NZ Super Fund and ACC joined NZ Post to become shareholders in Kiwi Group Holdings. Since 31 October 2021, any shares offered by any Kiwi Group Holdings shareholder and not taken up by other existing Kiwi Group Holdings shareholders would be available for the Crown to purchase directly," a spokeswoman for Finance Minister Grant Robertson says. 

"Ministers and officials are currently considering the best ways for the Crown to express its ownership interest."

The 2016 deal saw the NZ Super Fund invest $263 million for a 25% stake, and ACC $231 million for a 22% stake, valuing Kiwi Group Holdings at $1.050 billion. NZ Post retained 53%.

At the time it was announced that ACC and the NZ Super Fund couldn't sell their Kiwibank stakes to anyone other than existing shareholders for five years. After that, if they want to sell, the Government has the option to buy the shares back before they are offered to any third parties. 

A spokesman for the NZ Super Fund says it's a long-term investor and remains supportive of Kiwi Group Holdings Limited.

"Kiwibank has been a strong asset for the Fund, providing us with direct exposure to New Zealand’s banking sector through its innovative personal and business lending services. We do not comment on our investment intentions so I cannot confirm or deny if we are looking to change our investment in Kiwi Group Holdings," the NZ Super Fund spokesman says.

An ACC spokeswoman says it doesn't comment on decisions regarding its investments.

"NZ Post holds a 53% share of Kiwi Group Holdings and we will continue to maintain that ownership, unless advised otherwise by our shareholder, the Government," an NZ Post spokeswoman says.

A Treasury spokesman wouldn't confirm or deny reports that investment bank Goldman Sachs has been engaged to assist with the process.

"From time to time the Treasury contracts external advisers to assist it in various matters. It does not comment on who it might have engaged in specific instances as this is usually a confidential commercial arrangement," the Treasury spokesman says.

Kiwi Group Holdings sold life insurer Kiwi Insurance Ltd to NIB NZ Holdings for $45 million in November. And in January The Australian Financial Review reported Kiwi Group Holdings had hired Goldman Sachs to test the market for Kiwi Wealth following unsolicited approaches for the fund management business that's a KiwiSaver default fund provider.

Of the AFR report a spokesperson for Kiwi Wealth says: "The media speculation is a bit unsettling but as our owner Kiwi Group Holdings said in response to recent media enquiries, there is nothing to announce in that regard. From our perspective, it’s business-as-usual and we remain 100% focused on our mission to provide great investment outcomes and ensure every Kiwi has the opportunity to enjoy a brighter future."

Challenges for the three shareholders

The relationship between the three Kiwi Group Holdings shareholders has had its challenges.

In 2017 NZ Post coughed up $15 million to the NZ Super Fund and ACC to settle a dispute relating to Kiwibank's disastrous and abandoned CoreMod banking system upgrade.

Also in 2017, the three shareholders coughed up a combined $247 million to bolster Kiwibank's regulatory capital following a Reserve Bank decision that two Kiwibank bond issues no longer counted towards regulatory capital requirements.