Kiwibank is getting a government subsidy, but I suspect that its value is way less than the bailout that the Australian banks are getting from the RBNZ. I would certainly like to see independent (overseas) analysis of the value of both subsidies made public.

In terms of Kiwibank's advertising, I believe it has past its use by date and is probaly now doing the bank more harm than good.

The ads generally just suck. I don't think they are funny but at the same time I don't think they are "reprehensible" or "outrageous", just lame.

On the other hand I love Kiwibank to bank with. The best interest rates for savings, great online banking, great mobile banking (iPhone). What else do you need? Going into the branches sucks but how often do you need to do that these days?

"Reprehensible" and "outrageous"? These words probably apply the way the overseas owned banks sold debts; offered lower interests to cut the throat of the competitors- and not to the Kiwi bank advertisements. Why the ex-BNZ chair is baking a moral ground on this? It looks like they are getting the fear of losing slowly. All advertisements must comply with a code of conduct. There are duly laid down process to object advertisements, which are not complying with the code. Why not OZ banks resort to the formal remedy if Kiwi bank's advertisements are reprehensible and outrageous? We all know that advertisements are exaggerations and the viewers are in no way mislead. There is also another bank advertisement which make fun of American banks. Would you call it "reprehensible" and "outrageous" too?

Ken,

Only too true, and not to forget the BNZ, which was pretty good a long time ago, but crap soon after being taken over as well. Been banking with them for 18 years and have switched to KB a couple of years ago simply because of the crap saving rates, poor account product offering and not to mention the fee hikes into the stratosphere at every possible turn of the dollar in your accounts! It is simple really, KB is offering better service and lower fees, in my case at least. And as to ads, well, I like them! Anyone who doesn't can always complain to the relevant authorities...

maybe the ad of the BNZ pigs taking our money overseas and living up large was a staff training video.

Mason, it is nothing to do with patriotism but just pragmatism. The banking industry failed to take basic precautions in not over-lending and excessive risk taking in many countries particularly in US, Ireland and UK. Our banks are largely Australian owned and hence there are limited checks and balances in the way they operate. The central bank is alone not sufficient to ensure regulate them. We need few more players, particularly a strong locally owned bank. Many developing countries such as China, India have public sector banks, which do compete well with overseas banks & keep them in a balance. Kiwi bank must grow in its size and become a real overall player beyond what they do in the home mortgage market.

A few of us may own a little piece of Aussie banks. But all of us own the kiwi bank. That is the main difference.

Private banks basically serve the private shareholder interests. Public banks will be able to serve public interest. For example, lack of rural banking services (in addition to many other factors) contribute to increasing urbanisation. The government has to foot the cost of urban development and have to handle the associated problems. It is not possible to measure the benefits of having a public bank using direct dollar profits and looses.

Sam.P - it is shame you show your utter ignorance here; how is KiwiBank serving the public interest? By taking a huge public subsidy to run? By making people like yourself think they have created branches all over the place through post shops (sorry mate - TSB beat them to that by over 5 years...)

I see mention of BNZ a few times above; don't forget the reason that was sold - after the Labour party bankrupted it. Another great advertisement for Govt owned banks.

In fact go *actually* look at the meltdown in the states with Fanny Mae and Freddy Mac - and learn what a GSE is. And then explain how different that structure and their behaviour is from Kiwibank -then shudder as you realize it's exactly the same...

I think the BNZ guy needs to lighten up. May be the pre-Xmas stress is getting to him?

sam.p> Private banks basically serve the private shareholder interests. Public banks will be able to serve public interest.

Obviously the invisible hand has never made it into your thinking!

sam.p> For example, lack of rural banking services (in addition to many other factors) contribute to increasing urbanisation.

And the problem is? Urbanisation as workers moved from low productivity rural occupations has led to massive increases in living standards

waymad,

"If you look at their website, any heavy lifting (FX, letters of credit, aceptance of international funds etc) is handled by:

(whisper this very quietly, so as not to disturb the natives who actually believed the propaganda)

Citibank!"

...and you know how the big aussie banks settle European or US transactions? Well, maybe you could enlighten us again... But, psst, don't tell them that they all use intermediaries which presumably also charge for their services just like Citi does.

Come on, get real, none of the banks here in australasia actually have their own full service international branches in europe or US. BNZ used to have a relatively (in NZ terms) impressive London branch back in the late eighties, but that was one of the first casualties after sale and 'restructuring'.

Dealing with the KB priority banking team is an absolute joy in comparison to BNZ and my Westpac business account. They are simply good at offering a very fast and efficient service and the aussie banks obviously noticed that.

iiq374, anyone who looks at only short term profits or losses is actually ignorant. Why would the public need a government security suddenly? What is the cost of "confidence" or "fear"? Public banks play a crucial role in keeping a balance, providing checks and balances on the private banks. The gains of this role can be gauged only in the long run, and the benefits of having a public bank cannot be directly measured in dollar terms. We just have to see what private banks did in other countries, particularly in the USA. The short term profit strategy can even bankrupt a country. Likewise countries without private banks also suffered in the past. When we take a life insurance policy we don't look for "profits". Kiwi banks is also like taking a life insurance in some way.

WAKE UP if you really know how competition and BUSINESS WORKS Kiwibank keeps foreign owned banks HONEST. Without Kiwibank these major players will keep rates of any kind high, why"¦ because they wouldn't have any competition from a different angle in this case a Kiwi angle as apposed to a dominant aussie one. So are these ads overdone?...no they are not, and no they will never be, and that BNZ ex whatever, proves that they and all other big banks are worried, and THEY SHOULD BE because alot of profits goes to fat cats overseas so whats anyones problem with kiwibank if they have any! Excuse my caps and exclamation marks but im tired of whiners especially when our people gets ripped off!!, surely these big banks puts money back in the nz market and may put back more or may not, but I bet you my butt they can put a lot more dollars into nz instead of shipping it back to their parent companies in oz. SO KIWIBANK KEEPS THESE BANKS FROM DOING THAT AND KIWIBANK WILL KEEP FIGHTING TO PROTECT WHAT WE DESERVE!!! And the new government or any goverment is a big FAT JOKE if they want to sell the Bank as there is no need to as eventually (which its starting to) support itself!!!!!! it wins many awards and its owend by an award winning company NZPOST

The kiwi bank ads are horrible and annoying and irritating
i wish they would get rid of them already. they are the most annoying ads ever made.

Brilliant gotta love the BNZ guy calling these adds outrageous .....what about the WESTPAC one saying they "support small business"?......has anyone had to deal with there conservative and unrealistic credit policies recently?

Big Banks dont care about the little guys at all so dont ever let the marketing fool you.

Kiwi Bank is a great alternative but only time will tell if they can maintain the "Home Grown" culture.

Hi, I applaud your blog for informing people, very interesting article, keep up it coming :)