Two CEOs, two disappointing profits and a message for the Reserve Bank
Thursday, 21 August 2025
Two high profile chief executives say the Reserve Bank Te Pūtea Matua has not done enough to ease the economic struggles of households, in the wake of its latest interest rate cut.
The central bank’s 25-point cut in its official cash rate on Wednesday to 3% didn’t go far enough, according to Kiwibank which reported a 5% drop in its after-tax profit on Thursday, in part sheeted home to the stuttering economy.
“We have got to get down to 2.5%,” said Kiwibank chief executive Steve Jurkovich.
Jason Walbridge, chief executive of casino operator SkyCity, echoed his counterpart.
“We are not seeing any green shoots yet or change in consumer behaviour,” he said. The casino operator unveiled an after-tax profit of $29.2 million on Thursday, much-improved but still well short of shareholder expectations.
Jurkovich says there are signs of economic recovery coming through, but not in the capital.
“When I’m walking around, places are much quieter, hospitality is much quieter,” the Wellington-based Kiwibank boss said.
Those green shoots of economic recovery the Government is so desperate to see can be found much further south as the dairy boom and tourism recovery boost Canterbury, Otago and Southland.
Christchurch was a big draw for young Kiwibank customers, and the bank has expanded its office space in Christchurch to cater for bankers swapping Wellington or Auckland, for the city.
But Jurkovich was also noticing another bleak trend: the children of friends and acquaintances leaving the country entirely.
Jurkovich’s children are 19 and 25, and like all parents, he is keen to see them make their way in careers near him, not in Australia.
“The amount of parents that I know of my sort of age where their kids are seeing going off to Australia for either work or university as their first choice is a real worry,” he said.
Jurkovich said households, however, were proving resilient, and there had been very little increase in people falling behind on their home loan repayments.
But he said had the Reserve Bank cut more deeply three months ago, households would have had the relief of lower mortgages rates, he said.
Walbridge said New Zealand was experiencing a “delayed” economic recovery.
“It's certainly a deep recession that we're in. Look, any cut by the Reserve Bank is a good cut until we turn the corner as a country,” Walbridge said.
“We are not seeing any green shoots yet or change in consumer behaviour,” he said.
Revenue per customer visit was down $5 in the last 12 months, and revenue at its Auckland, Hamilton and Queenstown casino and entertainment complexes was down in its financial year ending in June.
But, he said: “We are hopeful that we will start to see things pick up over the next 12 months.”
Despite the economic gloom, both Jurkovich and Walbridge were looking forward to their businesses raising capital to boost future prospects.
Kiwibank was preparing to raise up to $500m from investors.
“We are just completing all of the material due diligence for would-be investors, a real deep dive into our progress over the last 5 years,” Jurkovich said. “We will provide that information to would-be investors, and they'll review it, I suspect over a period of about six to eight weeks.
“That will take us probably into October, and then we'll have a feel for what people want to do in terms of potential investing,” he said.
Walbridge was hired to turn SkyCity around after a run of disappointments.
Part of the turnaround plan is to reduce debt by selling around $200m of assets, including a central Auckland office building, and by raising up to $240m from investors.
That capital raise has begun immediately.