Government approves next phase of capital raise process to support Kiwibank’s growth

In December 2024, the Government announced it was exploring a private placement of capital to continue to accelerate Kiwibank’s growth. Since then, Kiwibank’s parent company, Kiwi Group Capital (KGC) and the Treasury have been assessing investor interest in such an initiative.

Following this process, Cabinet has approved for KGC to proceed to the next phase of a potential capital raise of up to $500 million with timing and amount to be determined by KGC, and subject to final approval of terms and conditions by shareholding Ministers. The transaction is expected to occur prior to 30 June 2026.

David McLean, KGC Chairman, said: “The Government has reaffirmed its commitment to supporting Kiwibank as a competitive, New Zealand-owned alternative to the larger banks, ensuring better outcomes for all New Zealanders.

“The capital raise process aims to provide Kiwibank with capital to continue its above market growth and enhance its competitive position while ensuring all funds raised are invested into New Zealand’s future. There will be no return of capital to the Crown, and no changes for Kiwibank customers.”

Steve Jurkovich, Kiwibank’s Chief Executive, said, “Kiwibank exists to challenge the status quo and to disrupt the banking sector for the good of Kiwi. We are working to create a future where banking is stronger and fairer than ever before.

“Delivering on our Purpose of Kiwi making Kiwi better off is what differentiates Kiwibank and drives our performance, and that is what we continue to be focused on. Any capital raise would be structured to ensure Kiwibank’s continued role to improve services and pricing for consumers.”

The capital raising process is targeting New Zealand-based KiwiSaver funds, investment institutions, and professional investment groups. Kiwibank will remain 100% New Zealand-owned following the completion of any private placement.

Kiwibank half year 2025 highlights

• Kiwibank announced a net profit after tax of $92 million for the six months to 31 December 2024.
• Kiwibank achieved net lending growth of $2 billion growing its lending book by 6% to $34.4 billion.
• Home lending grew 2.1 times faster than the market and business lending more than 6 times faster than the market.
• Deposits increased $1.8 billion growing the Kiwibank deposit book by 6% to $30 billion (1.6 times faster than market growth).