At an estimated cost of NZ$2.1 billion, the change of ownership has all the hallmarks of a government bailout. Viability and competitionWith a 5% market share, Kiwibank is small and lacks the critical mass required to thrive and compete effectively. Other small banks remain well-capitalised and don’t face the same challenges as Kiwibank. The risks aheadThe most likely way forward for Kiwibank is to further increase lending to riskier clients. And the government will want to avoid Kiwibank taking on too much risk because that will put the future of the bank itself at risk.

Source: New Zealand Herald August 26, 2022 01:06 UTC