Commitment to growing Kiwibank
August 19, 2010
The Government has reaffirmed its commitment to Kiwibank. It has agreed to provide an uncalled capital facility to NZ Post so Kiwibank can continue to grow.
The Government will underwrite Kiwibank’s growth by providing an emergency funding facility to support its credit rating if times get tough. Kiwibank has an AA- credit rating on the strength of its parent company NZ Post.
Chris Tremain MP for Napier said “The Minister Bill English has announced that the Government was to provide Kiwibank’s parent, NZ Post, with a backup funding facility to be drawn on in emergencies. This valuable backing from the Government will ensure Kiwibank can continue with their growth plans.”
The uncalled capital is a vital plank in maintaining an AA- credit rating. The rating is needed if Kiwibank is to compete with the four main Australian banks, and expand into new sectors such as business banking.
“Kiwibank has recently announced that its full-year results show gains have slowed in a tougher operating environment,” added Craig Foss MP for Tukituki. ”With this backing Kiwibank will be able to draw on the Governments support but only in case of a significant unforeseen external event, not for regular business or growth initiatives.”
“Overall Kiwibank is still growing, even though markets are subdued. This support from the Government is a step in the right direction for economic recovery. We’re confident this will give NZ Post and Kiwibank the financial certainty they need to pursue their growth plans, says Chris Tremain and Craig Foss.
