It’s not Kiwibank up for sale, it’s NZ Post selling down its shareholding

Labour MP Michael Cullen comments on his meeting with the SFO after the Privileges Committee, Parliament, Wellington, New Zealand, Monday, September 22, 2008. Credit:NZPA / Ross Setford

Troubled state-owned New Zealand Post is selling 45 per cent of Kiwibank, 25 per cent to the New Zealand Super Fund and 20 per cent to ACC.The deal values Kiwibank at $1.1 billion, NZ Post chairman Sir Michael Cullen said. Both entities are owned by the New Zealand government.

“There’s no sale of Kiwibank outside Government ownership,” Cullen said, adding that if there had been a sale into private ownership it would have “almost certainly led to a higher price”.

The two organisations will be required to hold their stakes in the bank for at least five years. Should they eventually sell, the shares would be sold back to the Crown.

NZ Post is losing up to $30 million a year thanks to its mail business, while Kiwibank is becoming increasingly profitable.Cullen said it was clear that NZ Post was unlikely to be able to put more money into Kiwibank, and that as the bank grew it may need fresh injections.

It was possible that the added capital would come from NZ Post further selling down its stake.

Finance Minister Bill English said the deal kept the bank in NZ ownership.

“Kiwibank will remain 100 per cent government-owned – that is a bottom-line,” Finance Minister Bill English said.

Call me a cynic, but I expect the “Future of Work” crews like Vic Crone and Grant Robertson to come up with a plan.

ACC and The “Cullen Fund” are interested in owning part of Kiwibank.

But will the cash save NZ Post or simply delay the inevitable?


– Stuff




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  • john Doe

    Reminiscent of rearranging the deck chairs on the Titanic. I somehow dont think that even privatisation would save the old NZ Post “dog” from anything other than a slow painful death, sad as that may be.

  • NZ_Stormer

    An almost $500million cash injection will be great for KiwiBank. I see more positives than negatives here. Trumps the $100 million the Greens want to inject and didn’t cost the Government a cent.

    • CheesyEarWax

      And that cash injection won’t appear, and be a drain, in Bill English’s budget.

      • biscuit barrel

        The opposite, the detail says Kiwibank, will pay down debt, increase its capital reserves AND pay a special dividend to the Government.

  • Disinfectant

    It is always worrying when the Chairman of a company says that they could get more for the stake they are selling if they sold it to private interests.
    The sole purpose of the Board is to make the best return for their shareholder. That’s you and me the taxpayer.
    This type of thing is simply rubbish management called politics usurping business interests.

  • Cadwallader

    The ANZ may have purchased Kiwibank as they did with the Post Office Savings Bank back in the 1980s. That would’ve been a back to the future event for us all to marvel at. Little Angry’s lot would’ve screamed about selling “our assets” but it was Labour who did the deal with ANZ Bank the first time. Isn’t Cullen a two-faced clown awash in sanctimony?

  • CheesyEarWax

    Ok comrade Cullen, can we look at selling Kiwirail that you bought?

    • johcar

      Sell it for scrap?

      • CheesyEarWax

        $1 reserve should do it.

        • johcar

          I still think it would be a hard sell at that price…

          • CheesyEarWax

            You’re right, we should chuck in the City Rail Link as a freebie.

  • Christie

    Inevitable though it is, the demise of NZ Post is not solely the result of a changing world. That is part of it, sure. But their mail services have become so poor over the past few years that there is no alternative but to stop using them. It can take 2 weeks for a letter to get across town these days – and when anything is even remotely time critical, that is simply not good enough. And now that they are doubling their prices for ever more shoddy service, it really is a race to the bottom. It is a terrible shame.

  • cassandra

    Kiwi bank has capital needs fir growth that it’s struggling parent can not provide any longer. So something has to be done and this is an elegant solution without national taking a political hammering for privatising government assets. Key is smart.

    • biscuit barrel

      I think the main reason is English wants – no demands- a higher dividend and he’ll get it. This was the only way to do it.

  • Dave

    If you look back, the writing has been on the wall for NZ Post for years and years, and they have not grasped reality and taken the opportunity. Years ago I suggested to NZ post a strategic change, as it was so obvious postal volume and revenue was shrinking, their retail offering at post shops was about as modern as the retail at an outback town in Aussie, and as more and more moved online things like bill pay and registration would dwindle as well.

    However online shopping was INCREASING which meant Freight, or post. The concept was to work with the likes of TradeMe, make them a postal merchant, TradeMe knew the senders address, and the purchasers address, the dimensions / weight could have been entered at the point of sale, a price calculated and the rest is history. Trademe’s system could collect postage, print labels and all the seller had to do was drop the parcel off at an authorised collection point such as any BP station or similar that opens 24/7.

    But no, the collective was too hard, too futuristic, and the heads went back into the sand and stayed there. That’s the issue when you let public servants run what should be a corporate business, it gets fat, lazy, slow to react to the market, unions creep in and it rots from the top down.

    The thing to ask is how is parcel post going, compared to say Fastway couriers. I know the answers, it’s not complimentary to NZ Post.

    • biscuit barrel

      We could charge a surcharge for rural delivery as thats more expensive to run than town delivery’s.
      The other problem is there are more streets of new houses every year but no extra volume to cover it. An extra 20,000 homes per year – only some on existing routes- is the big killer.

    • CheesyEarWax

      Yes, Amazon is doing this. I also think Uber-style parcel service is waiting in the wings. So more trouble ahead for NZ Post bricks and mortar business I am afraid.

      • Dave

        From memory, I proposed the above in 2007, but the newly minted execs were not listening, preferring the new kiosk retail models and bright shiny retail shops. As I pointed out, these retail shops offered dead flies. A quick trip around approx 15 shops had over 10 of them with dead flies littering their windows and under counters, such were their high standards of retail presentation, not to mention dated cards, and droopy forms. They did have a good run of retail promotions for a few years, but I believe this didn’t really affect the bottom line.

        • CheesyEarWax

          I could never understood why NZ Post have expensive retail shops for such simple and low value products. They even sell magazines, another dying product. Don’t get me wrong, retail still work, just look at Apple stores and bank outlets, but not for every product and services.

  • Wheninrome

    Bring back the pigeon post, I can see pigeon lofts springing up all over the place.

    • johcar

      That would necessarily increase hat sales too, given the predilection for said birds doing their “business” while in flight….

  • BR

    “…while Kiwibank is becoming increasingly profitable.Cullen said it was
    clear that NZ Post was unlikely to be able to put more money into
    Kiwibank, and that as the bank grew it may need fresh injections.”

    If Kiwibank is increasingly profitable, why would it need further cash injections?


    • biscuit barrel

      Its called capital, and bank needs capital to expand. reserve bank rules mean for each $100 mill lent -( borrowed short term money market lent for home mortgages for 20years +)- they must have between 6-8% of capital ( its own money)
      That means the $100 mill capital the greens were talking about would equate to $1200 to $1500 mill worth of lending.
      lending money is what banks do, and they profit from that, so its higher returns for shareholders.
      Considering the government gives money all the time to private companies for all sort of things- give is the word here, want to set up a games development company , they will GIVE you money- putting an investment in a company the taxpayers own that will increase profits is probably the only good idea the greens have.
      Were they tipped off about the dividend raid by Bill English that this selloff will create ?

  • Catriona

    Postage stamps are going up to $1 on 1 July. Gotta keep making big profits does NZ Post.

  • Diehard

    Kiwi bank need to break away from NZ Post.

    I have had two dealings with NZ post this year and both times parcels have gone missing, in one case for three weeks and in the other never to be seen again. Sooner that company is closed belly up the better. From the ashes there will be opportunities for others. Only people I feel sorry for at NZ post are the excellent rural delivery drivers who give us great service, but it’s hard when the items don’t make it to them.

  • The only thing that will save NZ post is if the idiots running the only part of it likely to show a profit, NZ Couriers deliver when people are home or create an app that tracks your delivery and can be updated with a new address or time if the delivery is inconvenient to the end user….sometimes referred to as THE BLOODY CUSTOMER!

  • woollyone

    In our business we use NZ Post for a very large volume of international parcels. They are excellent and have given great service to us for about 20 years. Just wanted to give them a thumbs up.