25 May 2010

More Govt capital 'needed' for KiwiBank

3:38 pm on 25 May 2010

The Government could have to find more than $500 million within the next five years to keep KiwiBank growing at its present rate.

KiwiBank's $9 billion loan book is currently backed by $400 million in Government capital.

Massey University finance lecturer David Tripe says $600 million of new equity will be needed if current growth is maintained and the loan book hits $20 billion.

Even more could be needed if Australian-owned banks divert capital to higher-growth Asian markets and their lending in New Zealand drops.

Prime Minister John Key on Monday reiterated that the Government could consider a partial sharemarket float of KiwiBank.