Government-owned Kiwi Group Capital is sinking $225 million into its subsidiary Kiwibank to help fund the bank's growth.
Kiwi Group Capital subscribed for an additional $225 million of common equity share capital issued by Kiwibank, thus giving Kiwibank a needed capital boost. As of March 31 Kiwibank had a total capital ratio, expressed as a percentage of its risk weighted lending exposures, of 13.4%. The Reserve Bank mandated minimum is 10.5%, but will rise to at least 16% in 2028.
Kiwi Group Capital's Chairman David McLean, the former Westpac New Zealand CEO, says the money comes from the $310 million sale of Kiwi Wealth to Fisher Funds last year.
Kiwi Group Capital was established in November 2022 to acquire and oversee the Crown’s investment in Kiwi Group Holdings, the owner of Kiwibank and The New Zealand Home Loan Company.
In a statement McLean says the investment represents the next step in the strategic portfolio reshaping actions taken by the owners of Kiwibank over the past year following the sales of Kiwi Wealth and Kiwi Insurance to focus on its core banking business. Life insurer Kiwi Insurance was sold to NIB for $45 million in late 2021.
"This investment generates long-term value for shareholders and is well-aligned with Kiwi Group Capital’s strategic objective to help Kiwibank provide a competitive banking alternative for New Zealanders," McLean says.
In August last year it was announced that the Crown was buying Kiwibank from the NZ Super Fund, NZ Post and ACC in a deal valuing Kiwibank's parent company, Kiwi Group Holdings, at $2.1 billion. In March Kiwi Group Capital amalgamated with Kiwi Group Holdings, the previous 100% shareholder of Kiwibank.
Kiwibank Chief Executive Steve Jurkovich says the capital injection will enable Kiwibank to continue to deliver on its growth ambitions; "by supporting Kiwis with their home ownership aspirations and backing local businesses to thrive."
10 Comments
Yup, sell productive assets to make more cash available to the wealthy to spend on houses, cars and boats.
If you lose a few thousand Kiwis to greener pastures in the process, we can always replace them with imported wage/rent slaves... sorry, the term is "motivated migrants with a strong work ethic".
Hopefully they can rebuild their core banking system this time. They wasted 25-30m on a failed rebuild of their core banking infrastructure (which is literally reheated Post Office Bank Cobol Mainframes from IBM).
They need to steal some founders of Monzo bank in the UK, fly them over and rebuild their core banking infrastructure.
Also, since it is 100% government owned, should the source code for the bank infrastructure be open source?
Sounds like they are already well on the way to rebuilding their IT systems.
https://www.reseller.co.nz/article/695126/under-covers-kiwibank-selects…
It was actually over a $100 million that they wrote off, in their SAP experiment (never ever go with SAP systems). With some stuff actually delivered, so the overall spend was higher.
There is no remnant of any Post Bank systems of infrastructure in Kiwibank. It was incepted as a totally new organisation.
How do I know? I was there.....
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