Kiwibank CEO resignation leaves unanswered questions

Today’s shock resignation by Kiwibank’s outstanding chief executive Sam Knowles adds to unanswered questions following Finance Minister Bill English’s blunder last Friday about selling the bank, says Labour Finance spokesperson David Cunliffe.

“Sam Knowles has done a magnificent job setting up Kiwibank,” David Cunliffe said. “His resignation is a huge loss, and couldn’t be worse timing for the Government given the uncertainty Bill English has created about the bank’s future.

“His gaffe on Friday to a post-budget audience in Christchurch about what he really wants to do with Kiwibank has sent Prime Minister John Key into hasty damage control, and has outraged many of Kiwibank’s 700,000 loyal customers,” David Cunliffe said.

“The economics of retaining Kiwibank in public ownership are absolutely compelling.

“Kiwibank has played a major role in improving the competitiveness of the banking industry as far as Kiwis are concerned.

“We need to be encouraging locally-based sources of capital creation and banking, not selling off an asset that Kiwis have clearly shown they believe in.

“The Crown will make a tidy return on any future capital injections it makes to the bank.”

David Cunliffe said Kiwibank had been growing fast. “Its market share is worrying the big four Australian banks. It’s worth asking whether pressure from these banks added to Bill English’s determination to sell this strategic asset.

“What communication has there been between the Government and the boards and managements of NZ Post and Kiwibank over recent months? How did Sam Knowles feel when Kiwibank’s request for a Crown capital injection was turned down earlier this year? These are unanswered questions.

“The Government also has a potential governance issue on its hands now as it tries to dig itself out of the public relations and economic hole it has dug itself into the past week.”

Further information: http://www.issues.co.nz/bankinquiry

ENDS

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