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5 Comments
'...secure bigger firms as customers'
I wish them all the best. But what a smaller bank doesn't have, that a bigger one does, is the capacity to absorb a mistake if a larger customer fails. Having worked for one such entity, I can attest that it can be fatal. You then find your bank has been compulsorily merged with a bigger bank to lessen risk to the wider system. And of course, the taxpayers' balance sheet always awaits.
You could argue pursuing bigger businesses is lessening the risk compared to being primarily in residential property.
Banking for business is a lot about relationships, you need competent people representing the bank that you get on well with and knows you, your business and your staff. It's hopeless if the bank changes their contact person every couple of years.
Throw in ASB as well. There's another pitching its business for the Indian Community. Probably too saturated with Pakeha to worry about them.
KiwiBank was started with the dregs from the other banks. Probably took them at least ten years to shake that off. Still made a huge stuff up with their IT systems in the last 5 years or so, $90m impairment. The then CEO retired or resigned within two years of that.
Also from personal experience giving me a mortgage for a residential property on two seperate occasions, between 15-20 odd years ago was too risky for them. Hardly a second thought with one of the big bad Australian banks. I still use KB for TDs though.
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