Kiwibank to add $700 Million to loan portfolio
15/02/2007
Kiwibank has reached an agreement with the Hong Kong and Shanghai Banking Corporation Ltd (HSBC) to negotiate the acquisition of HSBC's AMP-originated residential mortgage book which has a total book value of around $700 million.
Kiwibank will acquire the mortgages and manage them under the AMP brand. This transaction begins a relationship between Kiwibank and AMP that will see Kiwibank assist AMP's re-entry into the New Zealand mortgage market by providing AMP-branded mortgages to customers introduced by AMP.
This relationship will further expand Kiwibank's distribution reach and follows on from last year's acquisition of a 51% stake in New Zealand Home Loans.
Kiwibank Chief Executive Sam Knowles noted that the transaction is expected to result in Kiwibank's residential mortgage portfolio exceeding $4 billion for the first time. Kiwibank is currently evaluating its capital funding requirements for the transaction, including the potential to access the domestic debt capital markets. Further details on Kiwibank's capital funding plan is expected to be released next week.
Mr Knowles said Kiwibank looks forward to working with AMP to provide AMP-branded mortgage products in the future and to ensure there is a smooth transition of the existing mortgages from HSBC's ownership and management. The transaction is subject to agreeing legal documentation and is currently expected to be completed later this year. HSBC and AMP will together liaise with affected customers directly about the transfer to Kiwibank in due course.
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