“Kiwi(Post)Bank Model would work in Ireland”

Kiwibank model would work in Australia – and in Ireland:

In fact it’s exactly what we need to save the Post Office Network

& Provide Competition in the Banking Market.

Kiwi(Post)Bank Est. in 2002, now has 20% of the Banking Market in New Zealand.


Kiwibank model would work in Australia:

Kiwibank’s boss thinks the state owned bank’s business model would work well in Australia and provide competition to that country’s big four banks.


ACROSS THE DITCH: Kiwibank’s boss thinks his bank’s business model would work well in Australia and boost competition there.

Six Australia economists are lobbying for a “basic bank” like Kiwibank, using Australia Post branches to break the dominance of the big four Australian banks, the Sydney Morning Herald reported.

Kiwibank started in 2002 and operates through 300 NZ Post shops. It is wholly owned by New Zealand Post, which is government owned.

Sam Knowles, who is currently filling in as New Zealand Post group chief executive, put the business case for Kiwibank together and has worked in Australia.

Kiwibank has no plans to expand beyond New Zealand but Mr Knowles believes the business model would create a nationwide challenger to the standard bank model operated by the big Australian banks, which own New Zealand’s ASB, ANZ, BNZ, National Bank and Westpac.

“I think it could work in Australia but it would be a bit harder because there is more competition from non-banks there,” Knowles said.

The regional banks in Australia were not effective in providing competition nationwide, he said.

An issue for competition in banking was the cost of entry, Mr Knowles said.

“The big cost of entry for anyone getting into banking is a branch network,” he said.

“Aussie Post, like NZ Post, is the only entity with a well distributed network with the skills to do banking. The only other possible one is a supermarket but they don’t have the skills,” he said.

“Clearly we have proven with Kiwibank that the post network is the easiest way to get into banking,” he said.

He believes the big four Australian banks – ANZ, National Australia Bank, Commonwealth Bank and Westpac – would be pricing products higher in New Zealand if Kiwibank did not exist.

Kiwibank started with capital of about $80 million and critics said it would not work because governments were no good at running businesses.

Mr Knowles said the critics had been proven wrong.

“The customers wanted it and state-owned enterprises, like any business, can launch new businesses.

“We went out and hired people who knew what they were doing in banking and got them to establish a bank,” he said.

“We’d be happy to provide advice to Australia Post if they wanted to look at it,” he said.

The main issue for the post branches was providing office space for discussing bank services and beefing up security.

“It is a lower cost bank model because Kiwibank shares the network with NZ Post,” he said.

In Australia, the economists petitioned the Prime Minister and the Treasurer to set up an inquiry into Australia’s financial system.

The notion of a “people’s bank” has not been contemplated, the federal government, AAP reported.

Kiwibank made a $25.8 million after tax profit in the six months ended December 31, 2008. It had retail deposits of $6.3 billion at December 31.

Even with the existence of Kiwibank and regional banks the Reserve Bank of New Zealand has raised concerns at the level of interest banks are charging on floating rate mortgages.

The central bank has said the pricing of floating rate mortgages appeared “unusually” high in recent months.

The New Zealand Parliament’s finance and expenditure committee has decided not to hold an inquiry into the interest rates charged by banks.

Opposition MPs have criticised banks for not passing on the cuts to the official cash rate and ministers have urged banks to lower interest rates while the country struggles through a recession.

– NZPA – Last updated 14:24 08/07/2009



More on the KiwiBank Model from the PBFI Website:

New Zealand Post Office Bank – Est. 2001- A phenomenal success story.

Kiwi bank It's ours!.

Type State-owned enterprise

Founded May 2001

Headquarters Wellington, New Zealand

Key people

Paul Brock (Chief Executive)

Rob Morrison (Chairman of Board of Directors)

Products Banking and financial services

Number of employees 900+

Parent  New Zealand PostKiwi Bank 1

Kiwibank Limited is a wholly owned subsidiary of the state-owned enterprise New Zealand Post Limited. Through Kiwibank, New Zealand Post provides banking services through its PostShops (Post Offices) and joint venture Books & More and Papermate outlets throughout New Zealand. Kiwibank is owned by the New Zealand government and the company’s Board of Directors was chaired by former New Zealand Prime Minister Jim Bolgerfrom 2001–2010. The current Chairman of the Board of Directors is Rob Morrison.


The bank originated from Alliance Party policy during the 1999—2002 term of the Labour-led coalition government.

Jim Anderton revealed in his valedictory speech that after the issue had previously been discussed by cabinet for months, he had spent three hours trying to convince then Finance Minister Michael Cullen.

Annette King told Cullen: “Michael, Jim’s beaten back every argument against the bank we’ve ever put up. For God’s sake, give him the bloody bank.”

Cullen replied: “Oh, all right then.”

Kiwibank launched in 2002 with 211 branches open nationwide by 30 June.


Kiwibank invested NZ$8m into a 51% shareholding in New Zealand Home Loans, a home loan lender specialising in debt reduction, in June 2006, and increased this in 2008 by a further 25% and took 100% in 2011. New Zealand Home Loans continues to grow offering an alternative to the traditional banking model and have a nationwide network of over 75 franchises.

In 2012 Kiwibank purchased Gareth Morgan Investments (GMI) for an undisclosed sum.


Kiwibank has won the Sunday Star Times/Cannex banking awards, in 2006, 2007, 2008, 2009, 2010 and 2012 for offering the best value across their range of products.

Other awards won by Kiwibank include:

Bank of the Year – New Zealand, The Banker, 2009, 2010

Sunday Star-Times’ Bank of the Year, 2006, 2007, 2008, 2009, 2010, 2012

New Zealand’s Most Trusted Bank, Reader’s Digest Trusted Brand Awards, 2007, 2008, 2009, 2011, 2012

The Kiwibank Model: Postal Banks to Serve Local Communities

by Ellen Brown

Postal banks are now thriving in New Zealand, not as a historical artifact but as a popular new innovation. When they were instituted in 2002, it was not to save the post office but to save New Zealand families and small businesses from big-bank predators. By 2001, Australian mega-banks controlled some 80% of New Zealand’s retail banking. Profits went abroad and were maximized by closing less profitable branches, especially in rural areas. The result was to place hardships on many New Zealand families and small businesses.

The New Zealand government decided to launch a state-owned bank that would compete with the Aussies. They called their new bank Kiwibank after their national symbol, the kiwi bird. But the government team planning the new bank faced major challenges. How could they keep costs low while still providing services in communities throughout New Zealand?

Their solution was to open bank branches in post offices. Kiwibank was established as a subsidiary of the government-owned New Zealand Post. The Kiwibank website states:

Back in 2002, we launched with a thought: New Zealand needs a better banking alternative—a bank that provides real value for money, that has Kiwi values at heart, and that keeps Kiwi money where it belongs—right here, in New Zealand.

So we set up shop in PostShops throughout the country, putting us in more locations than any other bank in New Zealand literally overnight (without wasting millions on new premises!).

Suddenly, New Zealanders had a choice in banking. In an early “move your money” campaign, they voted with their feet. In an island nation of only 4 million people, in its first five years Kiwibank attracted 500,000 customers away from the big banks. It consistently earns the nation’s highest customer satisfaction ratings, forcing the Australia-owned banks to improve their service in order to compete.

Information from Wikipedia and Ellen Brown.

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