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Kiwibank's new boss Steve Jurkovich sets out 'to win in a uniquely kiwi way' as he takes the reins at the state owned bank

Kiwibank's new boss Steve Jurkovich sets out 'to win in a uniquely kiwi way' as he takes the reins at the state owned bank

New Kiwibank CEO Steve Jurkovich sees a "really good opportunity" to take "New Zealand's biggest bank" to "another level."

Jurkovich, who started as Kiwibank last week, told in a Double Shot interview the unique opportunity had attracted him to Kiwibank. Jurkovich jumped ship from ASB where he was latterly executive general manager of business banking, and before that executive general manager for corporate, commercial and rural banking.

"There's a really good opportunity to take New Zealand's biggest bank forward. For me the leadership opportunity was a bit irresistible once you started speaking to the shareholders around what their view was and what they wanted to achieve. It is the brand in New Zealand that can make a real difference. It has really got some scale and it's ready to go to the next stage. So all those things were pretty exciting," Jurkovich says.

Kiwibank's NZ ownership - it's owned by NZ Post, the NZ Super Fund and the ACC, is something Jurkovich clearly sees as a strength for the bank and something it can build on.

"For us it's a chance to really try and take things to another level and really try and understand what do we want to hold onto, what has served us well over the last 17 years, and what do we need to evolve to. The challenge, I guess, is making sure that we continue to earn the trust and support of the public [so] that they feel New Zealand's bank is really looking after them and genuinely helping kiwis to be better off. I think it's a pretty high standard and that's one of the things that attracted me to it [Kiwibank]. I think there's a sense of ownership from New Zealand[ers] because they literally do own us, and that's a bit different to some of the other structures that the other banks have got," Jurkovich says.

His new job sees Jurkovich as 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. He succeeds Paul Brock who left after seven years at the helm late last year. Since then Kiwibank's general manager of sales and service, Mark Stephen, has been acting CEO.

What about the core banking upgrade?

Kiwibank last year 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 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. 

Jurkovich says plans are well underway to replace the jettisoned CoreMod project.

"We're quite advanced in terms of the planning and the path that we want to take. I obviously need to get myself familiar with it and gain support for that plan and really sort of land that. But having said that the team has done a huge amount of work. There has obviously been a fair degree of introspection around what went on and lessons learned," he says.

With his background in corporate and rural banking, two areas where Kiwibank doesn't have a presence, does Jurkovich see opportunities there?

"Yes they are opportunities. Whether or not they're the priority ones for us, I think I need some more time working with the board to understand that. But small business, for instance, is the backbone of New Zealand so it's hard to think that we can grow and be successful without pushing more into that area. Likewise there's a lot of people facing the challenge of buying their first home. So we'll participate in those markets. But I am pretty open minded."

"One of the things I'm really excited about actually is when you're in the role I was in previously, you are very focused on a particular area. And [although] you do some enterprise stuff, it is pretty much business banking. Whereas in the new job it's sort of wing tip to wing tip - what are our opportunities, where do we think our brand can move to," says Jurkovich.

 Asked about morale at Kiwibank Jurkovich says there's a sense of opportunity.

"People are working through some of the challenges we've had and there have been some bumpy bits along the road, but generally speaking I would say people are upbeat about it. They're there because they think they can make a difference... there is an entrepreneurial spirit around the place. It's a 17 year-old start up that has got itself north of $20 billion [of assets]. So I think there's a sense of pride about that, but also I guess they're looking to the board, the new owners, myself to set a clear direction and be successful in the market."


Asked about Kiwibank's shareholders, and their willingness to fund growth, Jurkovich says they are supportive.

"They're prepared to back a coherent and credible plan, that has been a clear message to me. So it's really up to us as a management team, and as a company, to really articulate where we think we can win. And just as importantly how we can win with the New Zealand public as well. So they're up for it definitely, and they're just looking forward to us earning our right to get the investment. Because ultimately those owners are making choices like every owner is, and we're looking forward to demonstrating where they should put their money," says Jurkovich.

"We need to win in a uniquely kiwi way. I just don't see how you win in this market by being like everyone else."

*This article was first published in our email for paying subscribers early on Monday morning. See here for more details and how to subscribe. 

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Is this why productivity is declining?

As long as you can articulate it without using horrible phrases like "wing tip to wing tip", it should be OK.

hmmm... yea.... wing tip to wing tip... Steve is about to find out just what wingspan is he dealing with when he discovers he is severely capital constrained.

"NZ's biggest bank"... haha,, cute Steve... thankfully not accurate given the Aussie 4 are all locally incorporated and hold capital in NZ.

'Wing tip to wing tip' but where the engines are quickly running out of gas while a heavy load of debt in the cockpit could cause a rapid nosedive in profitability.

Let's hope he doesn't move from "wingtip to wingtip" to "wing and a prayer".

There is a tremendous amount of superficial corporate lexicon here, which doesn't fill me with optimism. While Kiwibank is tasked with making commercial returns it will always struggle to be relevant, it just doesn't have the scale. Banking really boils down to capital, technology and people and Kiwibank don't seem to be doing a good job in any of them. How big is the gap in products and service between kiwibank and the Australian banks and where is the point that wholesale switching starts to take place?

This is a real red flag as well by the way, "Asked about morale at Kiwibank Jurkovich says there's a sense of opportunity".