Change at top of Kiwibank board

Photo / File

The sudden departure of Kiwibank's chairman and deputy chair just days after shareholders answered a call for additional equity funding doesn't reflect any dissatisfaction about the state-owned bank's governance, a spokesman says.

Chairman Rob Morrison and deputy chair Rhoda Phillippo have resigned, effective this coming Thursday, Kiwibank said today. Current director Susan Macken was named as Morrison's replacement and the board will appoint a deputy when it meets on Thursday.

Rob Morrison is chair of HRL Morrison & Co, the Wellington-based investment bank whose clients and co-investors include the New Zealand Superannuation Fund, one of the three Kiwibank shareholders that last week pumped an additional $247 million into the bank to ensure its capital stays within the Reserve Bank's regulatory requirements. Phillippo is a former chief operating officer at Morrison & Co and chair of Snapper Services, the Infratil unit that runs the Snapper card for public transport operators.

The extra equity capital was provided for Kiwibank by the NZ Super Fund, NZ Post and the Accident Compensation Corp after the lender abandoned plans for an A$175m (NZ$189m) bond sale last month after being told those instruments didn't meet the Reserve Bank's capital adequacy framework and that earlier issues of a tier 2 convertible subordinated bond and additional tier 1 perpetual bond also didn't comply.

Asked if there was any dissatisfaction over the Kiwibank board, the bank's spokesman Bruce Thompson said: "No. The reasons were as stated, that there has been an orderly change to the ownership and establishment of a new board."

NZ Super and the ACC installed two directors onto the Kiwibank board in December - Kevin Malloy and Scott Pickering respectively. The two state-entities finalised their investments in Kiwi Group Holdings, the owner of Kiwibank, last October. NZ Super has paid $263m to take a 25 per cent stake and ACC paid $231m for a 22 per cent stake, a deal that valued the lender at about $1.05 billion.

Kiwibank's long-term issuer credit rating was cut to A from A+ last month after the bank's unconditional guarantee from majority owner New Zealand Post expired. S&P's outlook for Kiwibank is stable, reflecting its expectation the bank will retain its focus on relatively lower-risk residential lending while maintaining its risk-adjusted capital ratio above 10 per cent.

The Reserve Bank is reviewing its definition of bank capital, the measurement of risks that the banks face and the minimum capital requirements and buffers to set up a regime that provides confidence in the banking sector.

NZ Post used the proceeds of its selldown of Kiwibank to repay $180m of debt and make a $100m dividend payment to the Crown.

Morrison joined Kiwibank's board in 2011 but Phillippo is a relative newbie, having become a director last year. Macken is a former director of Bank of New Zealand and her other current boardroom positions include deputy chair of Tamaki Redevelopment Co and director of the Treasury's advisory board.