Latest news with #NicolaWillis
Scoop
2 hours ago
- Business
- Scoop
Kiwibank Gets Green Light To Grow
Minister of Finance Kiwibank has been given the green light to compete more vigorously with the big four Australian-owned banks that dominate the New Zealand banking sector. Finance Minister Nicola Willis announced today that, following a market testing process, Cabinet had approved Kiwibank's parent company raising up to $500 million of capital to fund the bank's growth. 'Allowing Kiwibank to raise up to an additional $500 million is the first step towards giving Kiwibank access to the capital it needs to truly compete with the big four Aussie banks while retaining its intrinsic New Zealand identity. 'The Commerce Commission reported last year that New Zealand's four largest banks did not face strong competition when providing personal banking services. 'Advice to the Government is that an additional $500 million of capital could support up to $4 billion of business lending or $10 billion of home lending. 'To assess interest in Kiwibank, Kiwi Group Capital (KGC) engaged with New Zealand KiwiSaver funds, investment institutions and professional investor groups including Māori institutions. 'KGC has advised there is sufficient interest from professional New Zealand investors groups to proceed.' Nicola Willis says a future government may choose to publicly list Kiwibank on the stock market, but that won't occur without an electoral mandate. Irrespective of any future decisions, the Government has approved measures to safeguard the bank's New Zealand identity. These measures include maintaining at least 51 per cent government ownership of KGC for the foreseeable future and, through a Kiwi Share to be held by the Crown, requiring, among other measures: a majority of the directors of KGC to be normally resident in New Zealand; and Kiwibank maintaining its principal place of business in New Zealand. KGC has until 30 June 2026 to complete a capital raise, subject to final approval of terms and conditions from shareholding Ministers. Note: Kiwibank Capital Q&A What is the reason for increasing Kiwibank's capital? There is insufficient competition in the New Zealand banking sector. This has been confirmed by the Commerce Commission's market study into personal banking services. It found that New Zealand's four largest banks do not face strong competition when providing personal banking services. Will increasing Kiwibank's capital increase competition in the banking sector? The advice provided to Government demonstrates that providing Kiwibank with reliable access to growth capital will support it to continue to grow at above market rates and make it more competitive with the major banks. Is the government intending to publicly list Kiwibank on the stock market? In the long-term the most accessible source of capital for Kiwibank is through a listing on the public markets. This will not occur without an electoral mandate. Is there a danger Kiwibank could lose its New Zealand identity or be sold to offshore buyers? No. Irrespective of any future decisions, the Government has approved measures to safeguard the bank's New Zealand identity. These measures include maintaining at least 51 per cent government ownership of KGC for the foreseeable future and, through a Kiwi Share to be held by the Crown, requiring: the Government to maintain at least 51 per cent ownership of KGC for the foreseeable future a majority of the directors of KGC to be normally resident in New Zealand Kiwibank to retain its current company name and trading name Kiwibank to maintain its principal place of business in New Zealand any potential future foreign investors to be limited to owning a maximum of 20 per cent of Kiwibank's shares; and Kiwibank's head office to remain in New Zealand. How was interest in investing in Kiwibank assessed? KGC engaged with leading New Zealand KiwiSaver funds, investment institutions, and professional investor groups including Māori institutions. The study concluded there was sufficient interest to proceed to the next phase of the process. Is this a state asset sale? No. The type of capital raising being contemplated is not an asset sale as all the funds raised are for Kiwibank's future business growth. There is no return of capital to the Crown to deploy elsewhere and the Crown itself would not sell any shares. How will the value of investors' stake be assessed? The final price will be determined through a competitive process, so a positive result depends on sufficient investor participation and demand. When will the capital raise take place? KGC has until 30 June 2026 to complete the transaction, subject to final approval of terms and conditions from shareholding Ministers. This flexibility will allow KGC to take account of market conditions, investor feedback, and Kiwibank financial results releases. Shareholding Ministers will only approve the transaction terms and conditions if risks have been appropriately managed and the transaction is consistent with the Crown's interests.
1News
17 hours ago
- Business
- 1News
Kiwibank greenlit to raise $500m capital to challenge big four banks
Kiwibank has been given the green light to raise up to $500 million in new capital, a move the Government says will help the New Zealand-owned bank better compete with the big four Australian-owned banks. Finance Minister Nicola Willis announced on Wednesday that, following a market-testing process, Cabinet had approved Kiwibank's parent company to raise up to $500 million of capital to fund the bank's growth. "Allowing Kiwibank to raise up to an additional $500 million is the first step towards giving Kiwibank access to the capital it needs to truly compete with the big four Aussie banks while retaining its intrinsic New Zealand identity." A Commerce Commission report released in August last year found the banking sector was "uncompetitive' and that the four big Australian-owned banks made high profits while Reserve Bank rules made it hard for smaller banks to challenge. Several recommendations were made, including to increase Kiwibank's capital funding. ADVERTISEMENT Willis said advice to the Government was that an additional $500 million of capital could support up to $4 billion of business lending or $10 billion in home lending. "To assess interest in Kiwibank, Kiwi Group Capital (KGC) engaged with New Zealand KiwiSaver funds, investment institutions and professional investor groups including Māori institutions." They advised her there was "sufficient interest" from professional New Zealand investors groups to proceed. While the capital raise is not a state asset sale—no Crown shares will be sold and all funds raised will go toward Kiwibank's future growth—Willis said a future government may consider a public listing of the bank but that this would not happen without an electoral mandate. The Government had also approved measures to safeguard the bank's New Zealand identity. These include: Maintaining at least 51% government ownership of KGC for the foreseeable future. Requiring a majority of KGC's directors to be normally resident in New Zealand. Ensuring Kiwibank retains its current name and principal place of business in New Zealand. Limiting any future foreign investors to a maximum of 20% ownership. Keeping Kiwibank's head office in New Zealand. ADVERTISEMENT KGC had until June 30, 2026 to complete a capital raise which would be subject to final approval of terms and conditions from shareholding Ministers. Kiwibank. (Source: Supplied) KGC chairperson David McLean said the Government had reaffirmed its commitment to supporting Kiwibank as a competitive, New Zealand-owned alternative to the large banks. "The capital raise process aims to provide Kiwibank with capital to continue its above market growth and enhance its competitive position while ensuring all funds raised are invested into New Zealand's future. There will be no return of capital to the Crown, and no changes for Kiwibank customers." Kiwibank chief executive Steve Jurkovich said the bank existed to challenge the status quo and disrupt the banking sector for the benefit of New Zealanders. "Delivering on our purpose of 'Kiwi making Kiwi better off' is what differentiates Kiwibank and drives our performance, and that is what we continue to be focused on. Any capital raise would be structured to ensure Kiwibank's continued role to improve services and pricing for consumers."
Reuters
18 hours ago
- Business
- Reuters
New Zealand government-owned Kiwibank to raise up $298 million
WELLINGTON, July 30 (Reuters) - New Zealand has approved government-owned Kiwibank's parent company raising up to NZ$500 million ($298 million) as it looks to compete with Australian banks that dominate its banking sector, Finance Minister Nicola Willis said on Wednesday. "(This) is the first step towards giving Kiwibank access to the capital it needs to truly compete with the big four Aussie banks while retaining its intrinsic New Zealand identity," Willis said in a statement. Kiwibank is New Zealand's fifth largest bank, with the four largest banks all Australian owned. In August 2024, following a review of the sector, New Zealand's competition watchdog suggested that capitalising Kiwibank could provide the sector with a disruptor, which could improve competition. Willis said that advice she had received was that an NZ$500 million of capital could support up to NZ$4 billion of business lending or NZ$10 billion of home lending. Kiwibank parent company Kiwi Group Capital had advised there is sufficient interest from professional New Zealand investor groups to proceed and has until June 2026 to complete a capital raise, the statement said. Willis added that a future government may choose to publicly list Kiwibank on the stock exchange but that will not occur without an electoral mandate. Kiwibank was established in 2001 and has a market share of around 9%. The government has introduced a number of measures to safeguard the bank as New Zealand-owned and operated including a requirement that government maintain a 51% stake in the bank and retain New Zealand as its principal place of business. ($1 = 1.6790 New Zealand dollars)
RNZ News
18 hours ago
- Business
- RNZ News
Kiwibank given go-ahead to raise $500m in capital
Photo: Kiwibank Cabinet has given Kiwibank the green light to start raising up to half-a-billion dollars in capital after several months testing the market for interest. In December, the government directed the bank's parent company Kiwi Group Capital (KGC) and Treasury to explore the possibility with local KiwiSaver funds and investment groups. In a statement, Finance Minister Nicola Willis said KGC had since reported back that there was "sufficient interest" to proceed. "Allowing Kiwibank to raise up to an additional $500 million is the first step towards giving Kiwibank access to the capital it needs to truly compete with the big four Aussie banks, while retaining its intrinsic New Zealand identity," Willis said. Nicola Willis. Photo: RNZ / Mark Papalii "Advice to the government is that an additional $500m of capital could support up to $4 billion of business lending or $10b of home lending." The Commerce Commission has previously found that New Zealand's four largest banks do not face strong competition when providing personal banking services. Kiwibank now has until the end of June next year to complete its capital raise, subject to ministers' approval. Willis reiterated an earlier assurance that the government would not publicly list Kiwibank on the stock market without first seeking an "electoral mandate". She said the government had approved measures to safeguard the bank's New Zealand identity, including ensuring it remained majority-government owned and with a majority of its directors based in New Zealand. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
The Spinoff
18 hours ago
- Politics
- The Spinoff
Want cheaper butter? Get on board with the vegan agenda
Even if you're not ready to cut animal products out of your own diet, you can help by encouraging others – because lower demand means lower prices. With butter nearing $20 per kilogram, New Zealanders are wondering what might be done. Nicola Willis has proposed breaking up the supermarket duopoly. That would offer some relief, but it fails to address the root cause: global demand for dairy. Willis has rightly recognised that the New Zealand government has little control over global trends. But there is something simple each of us can do to improve the situation, even if only in a small way. We need to get on board with the vegan agenda. Don't worry: I'm not suggesting you adopt a vegan diet. On a personal level, the case is not always compelling. Vegans' grocery bills may be lower. Their diets healthier – although all diets incur micro-nutrient trade-offs. Vegans may even be slightly happier than average. However, veganism can be a tender topic, especially when making dinner plans with omnivores. If you're struggling to make ends meet, passing up the venison mince at the local foodbank can be a real sacrifice. Realistically, veganism's main selling point is alignment between values and actions. If your values align with animal exploitation and waterway pollution, then veganism may not be your cup of nutritional yeast. But the more vegans there are, the better for everyone else. Think about it: would you rather share a plate of filet mignon and black pepper tofu with a vegan or an omnivore? Unless you're concerned about your share of the tofu, then you should stake your bets on a vegan. Of course, sharing a plate is different from sharing the global food system. Instead of changing the demand (who we are sharing with) we can change supply (what is on the plate). If we increase the supply of dairy, prices will fall. Such reasoning may get an A in economics 101, where the only difference between dairy and computer software is the label in the spreadsheet. But increasing dairy production has real implications for land use. We badly need space for the Amazon rainforest, for peatlands, for indigenous New Zealand rewilding. A global expansion of dairy production is not feasible. It might lower prices in the very short term. But, last I checked, current technology has not yet solved the problem of milking a cow during a wildfire or flood. Of course, the relationship between supply and demand is also more complex than the textbook formula that lower demand leads to lower prices. However, it holds as a general principle. If you want to enjoy affordable butter, a good way is to reduce demand for dairy. A drop in global dairy demand would be bad news for the New Zealand dairy industry. This is a familiar problem in environmental policy. People are much more willing to pay for products such as butter than for environmentally helpful practices such as rewilding. The only viable solution is to create a funding mechanism to compensate farmers for greener pastures. If the price of butter fell to $10 per kg, but consumers paid $5 into a rewilding fund, this could be a win-win for farmers and butter eaters. Reducing consumption frees up money to invest in our environment. You should, then, throw yourself whole-heartedly behind the vegan agenda. You can't personally make much of an impact at a global scale. But social movements happen when large numbers of people make small changes. When a friend tells you they want to be vegan, do not roll your eyes and flood them with misinformation about nutrition. Instead, thank them for their service. Cook them a vegan meal. It can be as simple as vegetable pasta. You can help yourself to a double portion of parmesan if you like. Your guest is not having any. One major obstacle for veganism is the bizarre perception that it is effeminate. Even though it's 2025, this turns people off. Help us undo this by talking about vegan alpha males such as Alec Baldwin (wait, maybe not the best example?) and Joaquin Phoenix. Introduce them to vegan athletes such as TJ Perenara and Lewis Hamilton. Emphasise the 'masculine side' of veganism: the inner resolve, the power of reason over the smell of bacon, the capacity to tear the head off a raw broccoli with one's canines. And above all, annoy your friends with the case for veganism. Reductions in animal cruelty, space for wilderness, and the continued survival of humanity are pretty persuasive. You might just convert some of them. The high price of butter is a sign that we are running out of space. We need all the vegans we can get.
