Nicola Willis is right about beefing up KiwiBank to take on the Aussies. And it’s very unlikely the Government will want to spend the billions it will take to strengthen KiwiBank. So KiwiSaver funds should be given the chance. KiwiSaver funding KiwiBank. A 100% Kiwi solution. We’re keen:)
Sam Stubbs I know the big four Aussie banks are cheaper in Aussie so is that really because of competition from smaller banks or is it because the govt has better regulations and a govt prepared to use them. In my experience Kiwibank isn't cheaper or better than any other bank. If they are privatised and had more capital to compete would they be cheaper (less returns to shareholders) or will they just fall into line with the other 4.
Sam Stubbs why just kiwisaver funds? Kiwisaver is not a particularly good retirement investment vehicle given you talk about taking on the Aussies. Perhaps the Nats could improve Kiwisaver at the same time to reduce the madness of buying and selling housing to each other.
Why should KS savers risk their funds in a struggling bank with no chance of competing profitably?
That’s what happens when you have Labor dominated industry funds ( transition to retirement jobs for ex Labor politicians and unionists ) setting up a captive bank …….. And then you wonder why it was run so poorly ? It was self evident from the very beginning of setting it up that it was never going to be competitive with its peers - they can consider themselves fortunate that someone was prepared to take it off their hands rather than let it sink into irrelevance and obscurity ….. My 2c !!
Hopefully you have told them of your interest Sam. If they are not interested in listening to you, then who would they? If you need voter numbers, maybe your voice with a petition?
I tried to support Kiwibank with a home loan application for a new build, but turned away from them after the consultant I met: * Had breath like he hadn't brushed his teeth for a week (I was his first appointment that day!) * Was unable to perform the most basic of arithmetic calculations (percentages and addition) * Expected me to use every last cent of my cash before they would lend me anything for a home loan (I need to keep money aside for the bank's valuers, legal costs, council surprises, cost variations, and to establish a garden from scratch) Basically, he did his best to chase me away. So I left. Will I return? Well, that's the second time they've been so hard to do business with. When I first tried to buy a house, they were not even interested in speaking to me... They messed up. I gave them a second chance. They messed up again. I don't see myself approaching them again - it's a waste of time.
I’m all onboard. Competition drives innovation and better customer outcomes. Somethings bank have not prioritised in NZ. Severe under investment in digital infrastructure and net interest margins that are far too high. Grow Kiwibank via sale or aquisition. Next step is for the RBNZ to support digital/challenger banks to help disrupt the industry.
A couple of things are being overlooked. #1 How much govt debt is with each bank? Assume very low with KiwiBank. When Jacinda was in pwr she asked the banks to free up more money for lending. The banking association shot back for govt to pay off its loans as banks were already over extended. #2 and I believe this is most important. The RBNZ Funding for Lending program. Which banks are given preferential treatment? The Funding for Lending program bypassed the money issue by supplying money to banks at half OCR rates. So the banks aren't actually lending their money (thus huge profits), but yours. Also the govt profits from this making housing more costly. This was a way to TAX wealth when Jacinda tried to tax freeholds. RBNZ controls OCR and benefits from the +10bil already loaned under the program. If you and I did this it would be called a ponzi scheme. Loaning money that doesn't exist and I assume secured by Kiwisaver. The program docs are all redacted. So how does Kiwibank factor in this program of favoritism?
It will be a great opportunity for Kiwi saver fans to come in and then move their banking there In Australia this works with ME bank which banks a lot of the superannuation industry. ME Bank
Associate Professor at Victoria University of Wellington - I write about bank capital.
1moPopulism at the expense of financial stability, Sam. The idea that a small and infirm bank can compete against the Big4 is wishful thinking. Small and midsized banks are a problem in many countries: the US (Silicon Valley Bank), Spain (the Caixas), etc. The ECB agrees and expects innovation to originate from the big players. Willis' ideas are borderline irresponsible and could put financial stability at risk. See my comments: https://capitalissues.co/2024/04/18/populism-at-the-expense-of-financial-stability/ https://theconversation.com/owner-beware-4-reasons-why-selling-part-of-kiwibank-could-do-more-harm-than-good-235885