Kiwibank needs capital

Ian Rogers
New Zealand's National government on Friday indicated that it was likely to sell Kiwibank, though it may wait until after the next election to do so.

Speaking at a post-budget function in Christchurch the finance minister, Bill English, said Kiwibank had reached a size where it needed either a government guarantee or "an awful lot of capital", according to reports in the New Zealand Herald and elsewhere.

"But we have made undertakings to the public and we certainly won't move anywhere without getting a mandate to do so," he said.

Kiwibank sold NZ$150 million of preference shares in a public share offer last month.

Kiwibank had tier one capital of NZ$415 million as of December 2009, consisting mainly of paid up share capital of NZ$310 million.  The tier one capital as a ratio of total risk-weighted exposure was 7.2 per cent, down from 7.7 per cent the year before.