Kookmin Bank says it's quitting the New Zealand market following a strategic review.
"After a strategic review of the New Zealand financial market and the financial industry as a whole over the past few years, we have decided to gradually wind down our branch in Auckland and exit the New Zealand banking market over the next few years, as our continued business operations in New Zealand were uncertain in the future. This decision includes both our retail and wholesale banking services," Kookmin says.
Kookmin has been registered in NZ as a branch of its South Korean parent since 1997. As of June 30, Kookmin had loans of $415.9 million and deposits of $266 million. It made an unaudited profit after tax of $5 million in the six months to June.
Late last year the Reserve Bank confirmed it would restrict banks operating in NZ as branches of overseas banks to wholesale business. Kookmin had argued for branches to be able to continue taking retail deposits, with the status of each bank to be considered on a case by case basis.
Kookmin says it may offer borrowers a one-time extension for up to six months if their loans are set to mature by March 31 next year.
"This extension is available to give you sufficient time to find a suitable alternative financial institution, provided that your loan continues to meet our bank’s credit review criteria. We encourage you to take advantage of this if needed to ensure a smooth transition. For customers whose loans are set to mature after 31/03/2025, no further extensions will be available. We require you to arrange for your loan to be refinanced with another institution or repay it in full before the maturity date."
"If you hold a term deposit or instalment savings deposit, or have a loan with us, we will transfer the remaining balance of your account to the alternative bank account you provide upon the maturity of the term deposit or instalment savings deposit and the repayment of the loan. Please ensure that you need to provide us with your alternative bank account details before the maturity or repayment date. After the transfer of your funds, we will close your account, and you will no longer be able to make or receive payments through KB Kookmin Bank Auckland Branch," Kookmin says.
"If you currently hold a cheque deposit account with us, we kindly ask that you transfer your remaining balance to an alternative bank by 31/05/2026. You can do this through internet banking or by providing us with details of an alternative bank where you can continue your financial transactions."
4 Comments
Just one more click less competition for the big four.
But generally, we are heading into an era where the charging of interest won't be supportable. Put another way, if interest continues to be charged, it must be at the expense of someone else (in a less-than-zero-sum game under a sinking lid).
We now have two bank departures in less than two years - Kookmin and HSBC. In both cases, the Reserve Bank's punitive prudential regulation is cited as the reason for the departures.
Back in 2019, RBNZ justified its most-expensive-in-the-OECD regulatory regime with a cost-benefit analysis, concluding that making our banking system more restrictive and expensive would add 1% to GDP. Instead, we have a diminishing banking market, the Australian-owned banks are exporting 3% of GDP every year in profits to overseas shareholders, and the sheer inefficiencies of the banks are causing a further $6-$10 billion in deadweight losses across the economy.
By any reasonable measure, the Reserve Bank is failing as our prudential regulator.
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