Talk Money: march 30, 2016

  • 30/03/2016
Tony Field (Paul Henry)
Tony Field (Paul Henry)

Could the government sell Kiwibank?

There has been talk lately that the government might partially privatise Kiwibank.

That speculation has gained ground in the wake of the announcement that parent company New Zealand Post is cutting 500 jobs from within the postal service.

The board of NZ Post is looking at separating Kiwibank from the parent company.

Kiwibank made a $71 million profit in the six months to December and is responsible for the bulk of NZ Post's profits.

But the bank needs more capital so it can grow and better compete against the big Australian banks. If Kiwibank's balance sheet were separated from NZ Post, it would be able to borrow money more cheaply offshore.

That is where the idea of partially privatising Kiwibank comes in.

If the bank were to be floated on the share market it could attract some outside investment.

However any proposal to sell part or all of Kiwibank would be met with an outcry from opposition parties. Especially with the word Kiwi in the bank's name.

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