The surprise announcement by Kiwibank's chief executive that he is leaving has given fresh fuel to the debate around a potential sale of the asset.
Sam Knowles says he is leaving the state-owned bank after 10 years, but denies the decision is linked to the Government's consideration of a part-sale of Kiwibank in its next term.
However, Mr Knowles said on Wednesday it is important that Kiwibank remain in New Zealand control.
Kiwibank was set up by New Zealand Post as a subsidiary to provide a domestic alternative to the main Australian-owned banks in 2002. It now has assets of $12 billion and 700,000 customers.
The Opposition has seized on comments by Mr Knowles that New Zealand control is crucial to Kiwibank's reputation with customers, to back up its own arguments against asset sales.
Finance Minister Bill English last week floated the idea of partial asset sales in the future and used Kiwibank as an example.
In Parliament on Wednesday, Labour Party leader Phil Goff challenged Prime Minister John Key to be up-front with New Zealanders about whether he intends to sell Kiwibank.
Mr Key said no consideration is being given to asset sales, but National would campaign on the issue at the election next year if wanted to go ahead with them.
The Prime Minister would not be drawn on whether the Government would allow Kiwibank to forgo paying a dividend, so it could expand.
Mr Key said Mr Knowles has made a tremendous contribution to Kiwibank, but the announcement did not come as a surprise and is not related to recent talk about asset sales.
Bank's profits could fund future growth - Knowles
Mr Knowles cast doubt on one of the Government's key reasons for considering a part-sale of Kiwibank, telling media on Wednesday the bank's future growth plans could be largely funded out of future profits.
He says the bank could need as little as $100 million in extra capital to keep growing at its current rate and Kiwibank could triple the size of its loan book in the next 10 years.
Mr Knowles estimates contrast with comments from Finance Minister Bill English that Kiwibank needs a lot of capital. Mr English said that the bank's capital requirements could be funded from selling shares to investors.
But Jim Bolger, the chairman of Kiwibank and parent company New Zealand Post, said the bank needs much less capital than the other state-owned enterprise he chairs, KiwiRail.
Mr Bolger told Checkpoint Kiwibank's success it due to its marketing as New Zealand-owned bank, but a partial float would not necessarily jeopardise that success - depending on how it is carried out.
Mr Bolger says the $100 million Kiwibank has asked the Government for to enable it to expand further is not a huge burden on the taxpayer.
'Right time' to go
Mr Knowles says he had been considering leaving for the past year and it is the right time to go as the board puts its 10-year plans and capital requirements to the Government.
He told Nine to Noon on Wednesday he has had a memorable tenure and is proud of the bank's outstanding success, but wants to take a break.
Mr Knowles has not set a date for his departure and will stay until a replacement is found.
