Kiwibank will be looking to reduce costs as it expects much slower growth next year, says Michael Cullen, chairman of New Zealand Post, Kiwibank's parent,
BusinessDesk reports.
Cullen was appearing before the Commerce Select Committee for the postal and banking state-owned enterprises' annual parliamentary review.
Kiwibank's claim that it is cheaper than other banks was true from a customer's point of view, but this is not true of the bank's internal cost structures, Cullen said. "We are not low cost at the present time," he said.
The bank was staffed and organised on the assumption of very strong growth and, as a consequence, its cost ratios are quite high by banking standards, Cullen said.
Kiwibank's operating expenses in the latest six-month period, to December 2010, were NZ$118 million, compared with $111 million in the same period last year. Salaries and wages rose 8.9 per cent, to $41.2 million, in the December-half period.
For the 12-month period to June 2010, operating expenses were $218 million, which compares with ANZ's $1.56 billion for a balance sheet nearly nine times bigger, and ASB's $659 million, which is nearly five times bigger.