3 November 2000 Media Statement

Westpac result shows room in market for kiwi bank

Deputy Prime Minister Jim Anderton says claims that a kiwi bank couldn't make a profit are looking increasingly desperate after WestpacTrust announced its profit result today.

Westpac's profit announcement reveals the Australian-owned bank made an after tax profit on its New Zealand retail operations of A$250 million last year (NZD$327 million). Its 'non-interest' income is up 9%, which Westpac attributes in part to 'fee repricing.'

Competing banks argue in today's National Business Review that a kiwi bank would need to be subsidised. But Jim Anderton is rejecting those claims.

"With Westpac making a return on shareholders' funds of 16.2%, it is clear that the banking sector is very profitable. If they can be so successful, it stands to reason that a kiwi-owned bank using New Zealand's most successful public company – NZ Post – can also make money.

"One can only speculate about the motives of potential competitors who are trying to block a kiwi bank from competing against them," Jim Anderton said.

ENDS

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