Grant Robertson said the acquisition was an immediate asset transfer and would not change the overall value of Crown’s consolidated balance sheet.Photo/Hagan Hopkins, Getty Images
The government has agreed to buy Kiwibank from state shareholders who want to exit.
If the deal is approved by the Reserve Bank, the government will buy a 100 per cent stake in Kiwi Group Holdings, the parent company of Kiwibank and NZ Home Loans.
KGH is 53% owned by New Zealand Post, 25% by the New Zealand Pension Fund and 22% by the Accident Compensation Corporation.
Treasurer Grant Robertson said continuing to hold a stake in Kiwibank was not in line with NZ Post and ACC’s long-term strategy and investment plan.
“The NZ Super Fund had been interested in buying a majority stake in KGH but withdrew its interest as it was inconsistent with the government’s commitment to public and New Zealand ownership.”
When ACC and NZ Super Fund became shareholders in KGH in 2016, they agreed that the government would have a first right of refusal to any future share sale.
“The transaction ensures that Kiwibank remains 100% Kiwi-owned, a bottom-line commitment also made by the previous central government when it entered into the current ownership arrangement in 2016,” Robertson said.
The Minister of Finance stated that the government is grateful to shareholders for their investment and support in KGH over the past 20 years.
“The new ownership structure simplifies our ability to fully support Kiwibank in realizing its future potential,” added Robertson.
“It’s a win-win for Crown, Kiwibank and New Zealanders.
“Kiwibank and NZ Home Loans will continue to operate independently and at a distance from the government.”
Official ownership of KGH will be expressed through a newly formed Schedule 4A company called Kiwi Group Capital (KGC) and a separate board of directors.
The deal valued KGH at $2.1 billion.
“The acquisition process is an immediate asset transfer that does not change the overall value of Crown’s consolidated balance sheet,” Robertson said.
It requires the government to fund the purchase, which will be done through a multi-year capital grant.
“I want to be clear, it will be business as usual for Kiwibank and New Zealand Home Loans staff and customers,” Robertson added.
“With Kiwibank in Kiwi hands, Kiwis can continue to bank with a trusted, credible and competitive banking option that will be fully locally owned.”