Kiwibank ads outrageous - Former BNZ chairman

An interrogation scene in a Kiwibank commercial. Photo supplied.

State-owned Kiwibank's advertisements putting down Australian-owned banks are "reprehensible" and "outrageous", says former Bank of New Zealand chairman Kerry McDonald.

Kiwibank also had an unfair advantage through an effective government subsidy and was the most "unsatisfactory part of the banking equation", Mr McDonald told The Dominion Post newspaper.

Kiwibank chief executive Sam Knowles said calling the Kiwibank television campaign reprehensible and outrageous seemed to be "more than a little excessive".

The advertising campaign was intended to be fun and was clearly a spoof, he said.

Kiwibank is signing up about 2000 customers a week and has about 650,000 clients, though its market share remains relatively small at 6.3 per cent.

The advertising campaign has a World War II-style French resistance theme, featuring pin-striped suit wearing bankers storming the beaches with briefcases held over their heads.

Helicopter transporting pallet-loads of money (repatriated profits to Australia) are shown, along with interrogation scenes of male Australian bankers questioning a young woman with her hands tied.

BNZ, ANZ/National, Westpac and ASB Bank are all owned by big Australian banks, a fact that Kiwibank has always pushed in its advertising campaigns.

Kiwibank customers are depicted as members of a "resistance" against the foreign-owned banks, preferring a patriotic alternative.

McDonald said he supported Kiwibank being in the market, but it should operate on the same basis as other banks. It leveraged off non-bank subsidies in its over-the-counter business.

This is a reference to the PostBank business of accepting bill payments for energy, phone or vehicle licensing that takes place in all Kiwibank branches.

McDonald said competition from TSB and SBS as locally owned banks was "fantastic, and I hope they succeed magnificently"

- NZPA/HERALD ONLINE