Taxpayers top up Kiwibank with $15m

Kiwibank received another $15 million from parent New Zealand Post during the first quarter, meaning the three-year-old Government-owned bank has now received $138 million from the taxpayer.

The $15 million figure is in Kiwibank's latest quarterly general disclosure statement compiled for the Reserve Bank along with a $2.42 million post-tax profit in the three months to March 31.

The additional funding will be used to pay for ongoing growth including Kiwibank's push into the small and medium-sized business banking market.

The bank is targeting companies with one to 50 staff and revenue of up to $10 million.

A business case for the extra taxpayer funding was put to then State Owned Enterprises Minister Mark Burton last June but no figure was disclosed.

Craig Stuart, Kiwibank's chief financial officer, said taxpayer funding via NZ Post was continually reconsidered and more would probably be needed.

"We have got further capital needs," Stuart said. "It is likely that we will have some further needs for capital [from NZ Post] but we are now generating our own capital to a much greater degree than we were."

He said Kiwibank must meet a Reserve Bank requirement of maintaining its total capital at a minimum of 8 per cent of total risk weighted exposures.

The $2.42 million profit compares with a profit of $435,000 in the first three months of 2004, which was Kiwibank's maiden quarterly profit. Separately, it almost matches the $2.49 million maiden half-year profit the bank posted for the six months to December 31, 2004.

However, Kiwibank's net interest income - from which the main banks generate 70 per cent to 80 per cent of their revenue - was just $9.4 million in the quarter.

In contrast, Kiwibank's "other operating revenue", including bill payment services and international money transactions at NZ Post branches, totalled $19.46 million.

Kiwibank's home loan business grew by $123 million in the three months to March 31, lifting its mortgage book to $1.34 billion.

Deposits climbed $124,976 to reach $1.3 billion and total assets rose $165,000 to $1.7 billion.

Kiwibank was set up with $83 million of taxpayers' money in 2002. It received another $40 million from NZ Post in the 12 months to June 30, 2004.