David Tripe: Massey University Banking Expert on the Commerce Commission's report into the New Zealand banking sector

There's a belief the Government could make part of Kiwibank public-owned.  

The Commerce Commission's market study shows there's little competition between the big four banks, and they take high profits by international standards.  

It recommends giving Kiwibank access to more capital to better compete and become a disruptor. 

Massey University's banking expert David Tripe told Ryan Bridge that money could come from the New Zealand public.  

He says it would take some time to absorb a large amount of capital, so it's better done as a relatively slow process. 

Tripe says trying to grow a bank rapidly is usually a recipe for disaster. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
You would have seen the recommendations the final report from
the ComCom the Commerce Commission yesterday fourteen recommendations to make
our banking sector more competitive. Among those was an idea
to beef up Kiwibank, and this is something the government
is looking at. Nikola Willis says she's investigating, and she
was on this show last Thursday and asked her about

(00:20):
whether she would float, potentially float partially float key Bank
on the stock exchange and what she thought about foreign ownership.
Would you rule out foreign investment in Kibank?

Speaker 2 (00:31):
Well, look, I'm taking advice on what is needed to
get investment into Kiwibank. And if I say, I've said,
let's look at what the options are.

Speaker 1 (00:40):
So how could these options shake down? David Trump is
massive university banking expert. He's with us this morning. David,
good morning, Good morning Ryan. How do you best help
Keeybank raise capital? Is the what would be the smartest approach?
Do you think?

Speaker 2 (00:56):
Oh, I'm certainly some partial soil to the New Zealand
public would be one way of going ahead with that.
It wouldn't. It will take them time to absorb a
large amount of capital, so that's probably better done. As
a relatively slow process. On the other hand, just giving

(01:21):
them small and providing some more amounts of capital, it
isn't going to mean that they're going to grow very rapidly,
but trying to have them have to have a bank
grow rapidly as usually a recided.

Speaker 1 (01:31):
The disaster true, what is the Key We Bank done
in the past, because when they have had access to
extra capital in the past, have they used it for expanding.

Speaker 2 (01:43):
Generally? On the other hand, they got some more capital
about August last year and they've only partially used that
so far, so that processes that process has been relatively slow.
Now I've read something about how they're spending money on
digitalization again that that's that's not necessarily a bad thing,

(02:08):
and that's one of the things that they would need
to do if they were to expand significantly.

Speaker 1 (02:12):
Anyway, does in your mind, does Key We Bank need
to be key We owned.

Speaker 2 (02:19):
There's no necessity for any bank to be under any
particular country's ownership. What has happened in recent years is
that operating banks across borders has become has been made
more challenging by international regulation. So that may that might

(02:41):
that might limit foreigners will enlisted by KEW Bank outright,
but that's a step down the road that we haven't
got to yet.

Speaker 1 (02:52):
All right, thanks so much for your tom This morning,
David Truent, Massi University banking expert talking about the ComCom recommendations,
one of which is to give Kiwibank a big boost
so that they can be more of a player on
the local market.

Speaker 2 (03:05):
Just for more from News Talk sed B. Listen live
on air or online and

Speaker 1 (03:10):
Keep our shows with you wherever you go with our
podcasts on iHeartRadio.