NEW ZEALAND: by News WeeklyNews Weekly
Kiwibank on target for 100,000 customers
, November 2, 2002
Kiwibank, the new government-run bank in New Zealand, is on target for 100,000 customers after a year of commercial operation.
The new bank, which is fully-owned by NZ Post, officially began operating in a small number of branches in February this year. The nationwide roll-out of branches began in April and there were 211 open by the end of June. It now has about 260 operating, by far the largest network of branches of any bank in New Zealand.
Chief Executive Sam Knowles said the bank was making very pleasing progress. "Our customer base is continuing to grow at about 500 every business day. We now have 60,000 customers with support from across the country and across income sectors.
"Particularly satisfactory is our continued growth in the home loan and term deposit markets. Kiwibank has aggressively positioned itself as the best value home loan provider of the main banks and is attracting excellent support. Our variable rate has been consistently between half and a full percentage below the other banks."
The new bank has had a direct impact on other banks, which have dropped interest rates and bank charges to keep customers from switching to Kiwibank. The other major New Zealand banks are Australian-owned.
The banking survey by the University of Auckland Business School, released in September, found that during its first eight months, Kiwibank has attracted increasing public support.
In the previous survey, released before Kiwibank was launched, 31 per cent of respondents supported the concept of the bank. Now the bank is a reality, the proportion has risen to 43 per cent.
While the new bank is growing rapidly, it remains small by New Zealand standards. WestpacTrust has 1.3 million customers, although many of these are businesses, which lie outside Kiwibank's charter of providing only personal bank accounts.
It has been estimated that there are 250,000 small businesses in New Zealand.
A strong advocate of the expansion of Kiwibank into providing business services is NZ Economic Development Minister, Jim Anderton, who said recently, he would prefer businesses to "spend their cash on growing their businesses [rather] than expanding the profits of the Australian banks through excessive fees and business lending rates."
Kiwibank would need time to open the rest of its planned branches, Anderton said. "After that I would like to see its services expanded to include small businesses."
Kiwibank spokesman Bruce Thompson said there were no immediate plans to offer business accounts. "We would see that as a logical expansion, in time", but it next plans to introduce a credit card early next year.
The bank expects to have between 290 and 300 branches by Christmas.
The new head of WestpacTrust, an Australian, Ann Sherry, recently announced that she wanted to have talks with Kiwibank. Ms Sherry was formerly head of the Bank of Melbourne, one of the banks acquired by Westpac in Australia.
She said she was she was interested in discussing the availability of banking services for people in remote areas.
"One of the ways of making sure that happens is for banks to at least talk to each other about what they are doing, so you don't find communities with no banking at all."
If that approach had been adopted by the commercial banks years ago, there would have been less need for Kiwibank.