Kiwibank boss says sale talk not behind his exit

Outgoing Kiwibank chief executive Sam Knowles. Photo / Mark Mitchell

Kiwibank chief executive Sam Knowles says talk about privatisation of the bank is not the reason why he his stepping down from the job.

He said today he is prepared to stay on at the bank until a replacement is found.

Knowles has been involved with Kiwibank for 10 years, first helping to establish the bank and then leading it. No date has been set for his departure and Knowles plans to take a break.

News of his departure comes just days after Finance Minster Bill English said the Government might look to float a minority stake in Kiwibank on the sharemarket. And on Monday Prime Minister John Key said NZ Post, Kiwibank's parent, had asked for capital for the bank following a period of rapid growth.

NZ Post will start an internal and external search for Knowles' replacement.

Knowles told a news conference his departure had nothing to do with what the Government was talking about, nothing to do with board issues or the recently arrived NZ Post CEO Brian Roche, he was in good health and had not had a job offer from Australia.

"The reason I'm leaving Kiwibank is because it's the right time to leave Kiwibank and it's the right time for a number of reasons," Knowles said.

These included that the bank had proved its mettle by coming through the recession, with Knowles saying Kiwibank had the best outcome of any of the banks in terms of credit. Secondly, Kiwibank had delivered well beyond its business case put in place 10 years ago. And now a new business case, for the next decade, had been developed and put to the Government.

"We're comfortable where we are and are optimistic they [the Government] will agree to it," Knowles said. "I think it's the right time for me to stand back and someone else to look at the next 10 years."

The next decade should involve building on the customer base and moving into new markets.

"It's a natural point in the evolution of Kiwibank for me to stand back and let someone else take over," Knowles added. He said he had been considering leaving for a year or two.

Meanwhile, Knowles said Kiwibank had asked the Government for less than NZ$100 million and that the main issue with Finance Minister Bill English was whether the state-owned bank paid dividends to the Government.

"There are different options, we are not talking large sums of money. Largely the question is whether we pay dividends," Knowles said. "There are different options on the table but we're talking certainly less than $100 million. It's not large amounts of money. It's a couple of hours of government running."

He said the business plan targeted growth of Kiwibank's balance sheet of NZ$2 billion to NZ$3 billion a year over the next decade.

"We're more talking the debate around risk and return over a 10 year view of how big the Government is comfortable to have the bank and are they comfortable to reinvest in dividends as is happening at the moment."

English, Knowles suggested, was reflecting on the dividend reinvestment when he suggested Kiwibank needed hundreds of millions of dollars. "The dividends that he wouldn't get."

Asked about a potential partial sale of Kiwibank Knowles said: "Keeping New Zealand control of Kiwibank is part of the value of Kiwibank. Personally I believe that New Zealand control is important."

Later, Chairman and former National Prime Minister Jim Bolger said he expected to be replaced as Chairman later this year, when his term expires, by former Labour Finance Minister Michael Cullen.


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