Kiwibank has appointed former ASB executive Steve Jurkovich as its new CEO.
Jurkovich, who headed up ASB's corporate, commercial and rural banking during a period of rapid growth, starts at Kiwibank - in Wellington - on July 30. He succeeds CEO Paul Brock who left after seven years at the helm late last year. Currently Kiwibank's general manager of sales and service, Mark Stephen, is acting CEO. Jurkovich left ASB earlier this week.
Jurkovich will also be CEO of Kiwi Group Holdings Limited, the holding company of Kiwibank, Kiwi Wealth Management, The New Zealand Home Loan Company, Kiwi Insurance and Kiwi Capital Funding.
Kiwibank chairwoman Susan Macken says the state owned bank undertook a global search for a new CEO, focusing on finding someone with the experience, skills and capability to lead Kiwibank in a highly regulated, increasingly digital and fast-changing world.
“Our new CEO has extensive experience right across the banking industry, and what most impressed me is his focus on customers. He has demonstrated a deep understanding of the future of banking and a passion for doing what’s right for customers,” says Macken.
For his part Jurkovich (pictured) says he wants to work for a bank that respects and reflects that New Zealand is an increasingly diverse country with big ambitions.
"Kiwibank has an incredible brand that resonates with all New Zealanders and it’s a real privilege to be asked to guard and increase the reach of that brand. If we look at the revelations from Australia’s Royal Commission into Financial Services, we see a disappointingly low public perception of financial services there. But on this side of the Tasman New Zealanders should be pleased we have a higher level of scrutiny on our banking practices, and arguably a healthier industry culture too," Jurkovich says.
Jurkovich was most recently executive general manager of business banking at ASB, and prior to that he was executive general manager of ASB’s corporate, commercial and rural banking. In the latter role Jurkovich oversaw a period of strong lending growth by, as he put it, supporting ambitious customers.
A New Zealander, Jurkovich graduated from Otago University with a Bachelor of Law, and completed his MBA at the University of Sydney. He is married, with two daughters. Here's a video interview we did with Jurkovich four years ago.
Brock left after Kiwibank took a big impairment from dumping its CoreMod core banking system upgrade. The bank's annual results announcement last August disclosed a $90 million, or $65 million after tax, impairment from the CoreMod project. Then late last year a Kiwibank spokesman told interest.co.nz an additional $11 million hit recorded during the 2017 September quarter was the final impairment from the project, bringing the total pre-tax cost to $101 million.
The decision to cull the big IT project came after the NZ Super Fund and ACC bought into Kiwibank, taking a combined 47% stake. NZ Post holds the remaining 53%.
In February Kiwibank said its unaudited net profit after tax fell $21 million to $42 million in the six months to December 2017 from $63 million in the same period of the previous year.
9 Comments
I understand they delivered some aspects of their programme, such as implementing the SAP Payment Engine and building their own applications to replace elements of their legacy core system. It is a massive write-off nonetheless. I still wonder if they should have selected SAP Banking Services though. SAP creates software that can do a lot, but excessively monolithic and over-engineered. And regardless of whether it's successfully implemented or not, SAP solutions are EXPENSIVE
As a really quick and high level view, KiwiBank holds a little over 4.3% of the total "Other Borrowings" category, as at Dec 2017, according to the RBNZ Statistics (G1).
"Other Borrowings" does include some smaller items that aren't customer deposits, hence why I say it's really high level, but it's probably not ridiculously far off, and saves trawling through the disclosure statements.
I've been very nervous about having deposits in the Big 4 banks for quite some time because of all the enquiries going on in Australia right now. So this is good news for me. Although Kiwibank has a slightly lower credit rating than the big 4, I suspect that those credit ratings of our australian banks are higher than they should be. And as Kiwibank is NZ owned, if they get into the slightest trouble, our government may help them out, where as they have refused point blank to help you out if you loose your deposits to the Australian Banks. Food for thought anyway. Every banks has risks.
I'm not aware of New Zealand statistics but in the UK and Ireland (neither of which have as gooder perception of their banks as kiwis) people are more likely to get divorced than switch banks. Lots of people talk about switching banks but we like institutions we can implicitly trust. That's the fundamental misunderstanding about "open banking", are people going to trust some two-bit startup with our personal information and money? Probably not. For genuine competition we need more banks with more standardised products not more more dodgy fintechs that will go belly-up (probably taking people's hard earned with them) at the end of the economic cycle.
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