Kiwibank given approval to seek $500m from investors by June

Wednesday, 30 July 2025

KiwiSaver funds and other institutions including Maori investors have been approached to gauge their interest.

Finance Minister Nicola Willis has given Kiwibank formal approval to solicit $500 million in new capital after a feasibility study concluded there was sufficient appetite among investors to stump up the cash.

Willis said a future National government might choose to publicly list Kiwibank on the stock market, but that “won’t occur without an electoral mandate”.

Kiwibank parent company Kiwi Group Capital (KGC) would have until the end of June next year to complete a capital raise, which would be subject to the final approval of ministers, she said.

The Government first announced in December that it hoped to encourage investors to pump the additional funding into Kiwibank.

The Government says it is pushing ahead with moves to increase banking competition by boosting Kiwibank with a capital raise.

Cabinet papers showed that would likely be as an interim measure to raise funds until the bank had completed its major IT projects and was deemed ready for a share-market float in perhaps 2028.

Willis has presented increased funding for Kiwibank as one way that the Government could encourage more competition in the banking sector sector, with the other main hope being to encourage the greater uptake of open banking.

“Advice to the Government is that an additional $500m of capital could support up to $4b of business lending or $10b of home lending,” she reiterated today.

“Allowing Kiwibank to raise up to an additional $500 million is the first step towards giving Kiwibank access to the capital it needs to truly compete with the big four Aussie banks while retaining its intrinsic New Zealand identity.”

It has been assumed that the NZ Superannuation Fund, ACC and KiwiSaver funds would be the prime candidates to chip in funds for the capital raise.

KGC engaged with KiwiSaver funds, “investment institutions and professional investor groups including Māori institutions” during its feasibility study, Willis said.

Regards of any future decisions, majority ownership of Kiwibank would stay in public hands, she said.

KGC chairperson David McLean said the Government had reaffirmed its commitment to “supporting Kiwibank as a competitive, New Zealand-owned alternative to the larger banks”.

“The capital-raise process aims to provide Kiwibank with capital to continue its above market growth and enhance its competitive position while ensuring all funds raised are invested into New Zealand’s future,” he said.

“There will be no return of capital to the Crown, and no changes for Kiwibank customers.”