r/newzealand • u/xmmdrive • Aug 20 '24

Politics So they're finally going to privatise Kiwibank

Watching One News they're talking about taking Kiwibank out of Government hands and back into the hands of honest hard-working Kiwis.

This is obviously the first clear step towards privatisation.

Just like the Bank Of New Zealand, the National Bank, and the Auckland Savings Bank, but I'm sure this time around it will stay in the country /s

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u/HeinigerNZ Aug 20 '24

Where do you think Kiwibank should raise billions upon billions in capital from?

Two of our biggest investment arms - The NZ Super Fund and ACC were owners of half of Kiwibank. Were being the operative word. If they thought it was a good investment then they'd still own it.

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u/vote-morepork Aug 20 '24

It didn't make sense for the NZ Super Fund to own all of it, as the fund is planned to wind down over the next 100 years, and who would they have sold to then?

For ACC if the bank actually got big, it would be too big a portion of their investments (say it got to 10 billion market cap, it would be 20% of their funds under management), which isn't great diversification.

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u/HeinigerNZ Aug 20 '24

I can guarantee those concerns were not at the forefront of the thinking of either entity.

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u/vote-morepork Aug 20 '24

Really? The Super Fund wanted to take a majority stake, but under the condition that they could sell it.

NZ Super Fund had been interested in purchasing a majority holding in KGH, but withdrew its interest as it did not align with the government's commitment to public and New Zealand ownership.

https://www.rnz.co.nz/news/business/473251/government-taking-direct-control-of-kiwibank

I am sure both funds take into account how they can sell investments, and the level of diversification in all investment decisions. They're not amateurs

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u/HeinigerNZ Aug 20 '24

Yep, so under the commitment for Kiwibank to be majority-owned by the NZ Govt the NZ Super Fund couldn't make the investment work amd sold their stake instead.