Nicola Willis: Finance Minister on KiwiBank being given the green light to raise an additional $500 million

The Finance Minister's floating the idea of listing KiwiBank on the stock exchange. 

Cabinet has given KiwiBank's parent company the green light to raise an extra $500 million.

However, Finance Minister Nicola Willis says this won't occur without an electoral mandate.

"That will be for individual parties to take a position at the election - but I've been advised that any potential public offering could take place before 2028."

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Episode Transcript

Speaker 1 (00:03):
Digging through the spin to find the real story.

Speaker 2 (00:07):
Ory.

Speaker 1 (00:07):
It's Heather Dupas on drive with one New Zealand. Let's
get connected news talks.

Speaker 3 (00:13):
That'd be good afternoon. Can We Bank's got permission to
partially privatize. It's going to raise half a billion dollars
from investors to better compete with the big Aussie banks.
Nicola Willis is the finance minisine with us. Hey Nicola, Hi. Ever,
so who are you looking at for potential investors?

Speaker 2 (00:29):
Are New Zealand super fund funds in the form of
ken We Saver funds, potentially MARI investment entities and other
funds that exist in the professional investment community in New Zealand.

Speaker 3 (00:44):
And they've already said they're interested.

Speaker 2 (00:46):
Yeah. So we've gone through a very comprehensive market sounding
process over the past few months to see is are
there people who've got the capital and would want to invest.
And we've engaged with key we save funds, investment institutions,
fessional investor groups and the like and that has given
the Kiwi Bank and the government confidence that yes, this

(01:07):
is a capital raise that can succeed. And so we're
now moving to the formal process.

Speaker 3 (01:13):
Why not go bigger than five hundred million. You can
go a lot bigger than this.

Speaker 2 (01:17):
Yeah, look, it's a really good question. Actually, Kiwi Bank
is in the midst of a digital transformation and their
view is that completing that is actually necessary before they
go bigger. And in terms of the Crown getting the
most value for its stake, that we will get more
value in the future once that transformation has occurred. So

(01:40):
at this point their ability to deploy more than half
a billion dollars efficiently would be at risk. So we
think this is the right bit for where they are
in their growth chang.

Speaker 3 (01:49):
Okay, And so the half a billion dollars means your
ownership steak as the government is what eighty percent still Yeah.

Speaker 2 (01:56):
Look, it will depend on the final issue size. We've
said up to half a billion. It may not be
that amount in the end, and of course what share
of the business that represents will depend on the final
issue price in the final structure of the deal. But
we've set up to five hundred million. Is what we
are up for.

Speaker 3 (02:14):
And what's it going to take to get you to
list it on the share market?

Speaker 2 (02:19):
Well, again back to this point one, we've said, look,
let's get an electoral mandate before we do that, and
so that will be for individual parties to take a
position at the election. But I've been advised that any
potential public offering couldn't take place before around twenty twenty
eight because Kiwibank will have needed to have successfully completed
that transformation program to be appropriately positioned for that kind

(02:42):
of listing on the stock exchange. So that will be
something that I'm no doubt National Caucus will consider and
take a position on prior to the election. But the
advice I've received is pretty clear that the public markets
are going to be the most accessible source of additional
capital for Kwibank the future. And I'm ambitious for Kiwibank's growth.

(03:03):
So yeah, the idea of extra capital meaning that we
get more lending, a more competitive banking market, and textpays
out on the hook that appeals to me.

Speaker 3 (03:11):
Yeah, absolutely, Hey do you know what Cash Betel's doing here?

Speaker 1 (03:16):
No?

Speaker 2 (03:16):
I don't, but I am aware of Cash Betel's presence.

Speaker 3 (03:19):
How are you aware of Cash Betel's presence?

Speaker 2 (03:21):
Ah? Because there were a bunch of handsome men and
suits on the seventh floor, and I said, who's in
the building? Because these look like very serious people.

Speaker 3 (03:29):
Who's on the seventh floor? Are you on the seventh floor?

Speaker 2 (03:32):
Mm hmm.

Speaker 3 (03:33):
That means when he PE's on the seventh floor as well,
doesn't it, So are they here to see Winston?

Speaker 2 (03:37):
Well? The only reason I had anything to say and
answer to your question is because of that. So I'm
probably being overly open.

Speaker 3 (03:45):
Haven't you. You've said too probably. Thank you, Nicola, I
appreciate it. Nichola Willis, Finance Minister.

Speaker 1 (03:51):
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