Kiwibank advocates for fairer capital settings for Kiwi

Kiwibank welcomes the Reserve Bank of New Zealand’s review of key capital settings as a chance to level the playing field and deliver better outcomes for Kiwi.

In its submission, Kiwibank says capital settings can strike the right balance between competition and financial stability by ensuring they:

• Are not overly conservative – As a challenger bank, Kiwibank needs sufficient capital to support strong growth, and excessive requirements create unnecessary barriers.
• Establish a level playing field – Capital settings shouldn’t give some banks an advantage unless clearly justified by financial stability benefits.

Kiwibank broadly supports the consultation proposals, particularly introducing more granular standardised risk weights and removing Additional Tier 1 capital. However, further changes are required to ensure capital settings support a competitive banking sector, which Kiwibank outlined in its submission.

Steve Jurkovich, Kiwibank’s Chief Executive, says:

“At Kiwibank, everything we do is guided by our Purpose of Kiwi making Kiwi better off. To do that, we need capital settings that support competition without compromising stability. We want to see a framework that ensures fairness by removing barriers for smaller banks that are looking to grow and innovate so Kiwi have genuine choice in banking.”