Pedestrians along Queen Street in Auckland, New Zealand. — Bloomberg
WELLINGTON: New Zealand is considering plans to increase the capital of its state-owned lender to try and make it more competitive with Australian-owned banks.
KiwiBank can’t compete or drive change within New Zealand’s banking sector without extra capital, Finance Minister Nicola Willis said last Saturday.
Willis suggested the government may consider partial privatisation because the nation’s pension-saving system wants homegrown assets in which to invest.
“It’s time to explore all the options,” she said. “Let’s have a look at what’s possible.”
The speech came as local media reported last month that the government was open to selling a stake in the state-owned lender as part of plans to lift competition in the banking sector.
An antitrust report in March recommended KiwiBank be given greater access to capital to try to disrupt the dominant Australian-owned banks, which appear to be focused on protecting profit margins.
“Disruptive forces are needed to drive change. No more cosy oligopoly,” Willis said.
“I would like it to become a disruptive competitor that takes on the big Australian-owned banks.” — Bloomberg
