By Dan Parker
KiwiBank is pushing ahead with its ambitious growth plans, despite a drop in annual profits, thanks to a Government guarantee.
The guarantee means the state owned bank can borrow more money and keep up with customer demand.
In a move away from its Kiwi roots, the bank will be looking overseas for funding.
In a matter of days Sam Knowles will be part of KiwiBank's past. In his last public address as chief executive he was able to secure the bank's future.
“The announcement is an absolutely critical part of our future growth plans,” says Mr Knowles.
The bank's market share has grown close to eight percent.
Lending has increased by almost $2 billion in the last year to total around $10.4 billion.
The Government's unspecified guarantee of uncalled capital means KiwiBank will have a base to access more funds.
“It's been a long time coming, we have worked closely with Government for several months and now we are very confident we can move forward secure the credit rating which will allow us to remain competitive in the markets we chose to be in,” says NZ Post chief executive Brian Roche.
But Kiwibank's needs have outgrown the credit available to it here.
“We will be going off shore to tap into more off shore funding resources because if the Aussies come on shore and take our money we have unfortunately got to go off shore to access some of the more global markets,” says Mr Knowles.
Going abroad will be the KiwiBank's best option for keeping costs down.
Its annual profit has dropped by 13 percent to around $45 million because of increased funding costs.
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