Just looking at the latest quarterly data from the RBNZ Dashboard and reflecting on some of the upbeat news around Kiwibank’s rebounding profitability, I noticed this: Capital down (and the worst of the largest six banks), while the average bank increased capital. Profits, same story. Credit losses expected to rise relatively fast. Net income margin… Read More Kiwibank continues decline
Last week, Kiwibank’s owner Kiwi Group Capital announced that it invested $225 million into Kiwibank. The purpose of this investment is to accelerate growth. The infusion, a year after the government bailed out the largest New Zealand-owned bank, should be seen as an “expression of confidence”. I have written often about the bank, non of… Read More Kiwibank’s Strategic $225 Million Investment: Navigating Growth and Risk
Today’s updated RBNZ Financial Strength Dashboard shows that New Zealand’s largest banks are feeling the pressure of what looks like a cooling economy. Profits at the end of the first quarter are down, the Cooperative Bank reported a loss, provisions are up, net interest income is down. This is not great, because banks need profits… Read More Latest RBNZ Dashboard data shows New Zealand’s banks’ profits easing
This week, financial markets were spooked by the write-down of Additional Tier 1 securities of Credit Suisse. Soon after the writedown, a discussion ensued regarding its legitimacy. One camp argues that investors in these securities should have read the instruction manual. See the pointy opinion piece in IFR by Prasad Gollakota, the former co-head of… Read More What happened to the whipping boy of bank capital?
As you may have noticed, Radio New Zealand, a dominant player in the New Zealand media landscape, featured banks frequently this week. There were valid reasons for that. There was the demise of Silicon Valley Bank, which sparked unrest in the financial markets, which then affected Credit Suisse, the sickest bank in Europe. It is… Read More Radio New Zealand and KPMG on banking this week.
Yesterday, the New Zealand Treasury informed me that the files about the sale of Kiwibank would be released. The information release was originally scheduled for the start of November. However, Treasury delayed its documents release on Project Korimako until yesterday late afternoon, when most people’s minds were on the holidays. The link to the Treasury… Read More Project Korimako: The Kiwibank files
My last post covered the valuation of Kiwibank and its parent company, Kiwi Group Holdings Limited. As you may know, in August, the government decided to acquire this banking group. While most of the attention focused on the sale of Kiwibank, little attention was paid to the sale of Kiwi Wealth, the group’s wealth and… Read More The mysterious sale of Kiwi Wealth
Prompted by the announcement of the government acquiring Kiwibank for $2.1 billion, I wanted to know how they calculated that. The amount is large, about $400 per New Zealander. If you spend over $400 on something, I’m guessing you’d want to know why $400 and not one dollar, or perhaps $350? In the last couple… Read More The Value of Kiwibank
Today’s updated RBNZ Financial Strength Dashboard shows that New Zealand’s largest banks are on track to meet the increasing capital ratio requirements. This after a temporary set-back in the first quarter of the year, when new rules on the calculation of risk weights kicked in. Westpac was particularly hard hit by the new calculations, but… Read More Fresh RBNZ Dashboard data shows New Zealand’s largest banks on track to meet increasing capital ratio requirements
With Grant Robertson’s announcement today that Kiwibank will be acquired for $2.1 billion from its state-owned shareholders, it is clear that the government hasn’t learned much about banking since the global financial crisis. Despite Robertson’s cynical spin about establishing a bank that is fully Kiwi-owned, one that keeps all profits in New Zealand, and will… Read More New Zealand’s bailout of Kiwibank
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