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Kiwibank Continues Remarkable Growth

Media release
23 July 2003

Kiwibank Continues Remarkable Growth

Kiwibank has now signed up more than 150,000 customers, an increase of 115,000 over the last 12 months. The bank has also surpassed $500 million in home loans and has retail deposits of more than $450 million.

Kiwibank Chief Executive Sam Knowles described the growth of the bank as “remarkable and very encouraging”.

He said the development of the bank and balance sheet size have exceeded expectations and to continue the strong growth, additional capital investment is required to ensure the bank complies with Reserve Bank capital adequacy requirements. To meet these requirements, New Zealand Post is to invest an additional $40 million in Kiwibank over the next two years.

Banks are required to have capital of not less than eight per cent of “risk weighted exposures”. On present growth projections, Kiwibank will require additional capital of $22 million by 30 September this year and $18 million by 30 September 2004. Kiwibank is expected to generate a profit in year three of operation (2004/2005).

Mr Knowles said customer acquisition is presently about 400 new customers each business day. “Looking ahead, we expect Kiwibank will have a much higher market share than the five per cent projected in the original business case.

“The quality and mix of customers continues to trend in line with forecasts in the business case, dominated mainly by families, though accounts for under-18s are slightly ahead of forecast.

“Average balances are continuing to increase and high-value customers are depositing considerably more money than planned.

“Kiwibank’s focus will remain on customer acquisition, with a particular emphasis on customer quality.”

Mr Knowles said the continued growth in the home loan book has been very significant.

Kiwibank now has 287 branches operating, 220 of these open on Saturdays and 29 on Sundays as well. The bank recently launched a low-interest credit card.

ENDS

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