The Bank of New Zealand says it will probably appeal a High Court judgment ordering it to pay hundreds of millions of dollars in tax.
Following a 13-week trial in Wellington, Justice Wild has ruled that the bank used six offshore transactions between 1998 and 2005 in order to avoid paying $416 million tax. It's also liable for interest of $238 million.
In his ruling, Justice Wild said the transactions had no commercial rationale, logic or purpose.
If we have to pay we will - bank chief
BNZ chief executive Andrew Thorburn says the bank is reviewing the judgment and is likely to appeal. They're disappointed with the outcome, he says, because they didn't do anything wrong, but the judgment will have no impact on the BNZ's ability to meet any debt and/or equity obligations.
If it comes to the point where they have to pay the money, he says, they can afford to do so.
Altogether, Inland Revenue is seeking $2 billion in unpaid tax and interest from the country's four main banks. The BNZ was the first in court, and commentators say the outcome will set a precedent.
It's understood by Radio New Zealand business staff that Westpac, currently fighting its case in the High Court at Auckland,
may be liable for as much as $850 million.