National finance spokesperson Nicola Willis says Kiwibank will need capital injected into it over the medium term, but promises the bank will stay in "Kiwi hands."
During the MYOB/NZME debate between Willis and Labour finance spokesperson Barbara Edmonds on Friday morning, Sarah Trotman, chief executive of Business Mentors NZ, asked if there was potential for investment into Kiwibank and asked what the benefits to businesses would be.
"Last year, we looked at could we help inject additional capital into Kiwibank so it could grow faster," Willis said.
"Ultimately, the changes which the Reserve Bank made to the capital holding requirements of banks meant that Kiwibank doesn't need that capital for growth in the here and now, but over the medium term, yes, they will."
In May David McLean, Chairman of Kiwi Group Capital Limited (KGC) Kiwibank’s parent company, said work on alternative growth scenarios and capital was at an early stage.
That followed a decision made late last year that its proposed $500 million capital raise, endorsed by the Government to help Kiwibank better compete with the big four Australian-owned banks, was off the table.
The bank cited changes to the Reserve Bank’s capital requirements and said Kiwibank’s successful $400 million Tier 2 capital raise at an attractive price meant it could continue its “strong growth without the need for additional equity.”
"They will need it, and I want to see them get it so they can grow," Willis said.
"What it will mean for businesses is it will mean that there is a bank that is actively competing to lend to you, is capitalised to do so, and wants to take on those Aussies."
Edmonds asked Willis if she would keep Kiwibank in "Kiwi hands", to which Willis said: "Yes".
If she would privatise any of Kiwibank, Willis said they would; "find capital for it, and I tell you, in this country, there are iwi funds, there are infrastructure funds, there are KiwiSaver funds who want to invest in a New Zealand bank."
"They see the dividends. On the one hand, it helps grow Kiwi businesses in this economy, and on the other hand, they get a stake in a truly wonderful investment."
Kiwibank doesn't currently pay dividends.
Both Labour and National have previously said they would be releasing election policies on Kiwibank.
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