Wednesday, August 6, 2008

Will Kiwibank be sold?

Late last month, I finally got around to opening a Kiwibank savings account at New Zealand Post. My only hope is that Kiwibank doesn't go the way of the old Post Office Savings Bank, which was set up by the New Zealand Government in 1876 to give small investors a ready means of saving.

The POSB, which traded as PostBank, survived until 1989, when it was bought by the ANZ Bank. (In 1987, the Postal Services Act had split the New Zealand Post Office, a department of the government, into three entities - PostBank, a postal services company [now known as New Zealand Post] and a telecommunications company [now known as Telecom New Zealand].)

And what did the ANZ Bank do with its acquisition? The answer is that, after a "decent interval", the ANZ closed it down. One by one, PostBank's branches were shut, and its customers were shunted to the ANZ. Today, I doubt you will find a single branch of PostBank in the country.

None of this was in accordance with the wishes of the New Zealand banking public, which has always favoured retention of a New Zealand government-owned bank. Hence the initiation of Kiwibank, as part of Alliance Party policy in the 1999-2002 Labour-Alliance coalition government.

Today, Kiwibank is owned by the New Zealand government and is chaired by former New Zealand prime minister Jim Bolger. But who can say what will happen in the future, in view of National Party deputy leader Bill English's comment, at a party conference last weekend, that National will sell the state-owned bank "eventually"?

Since then, there has been some fairly furious back-pedalling by National, which knows how keen New Zealanders are to see that Kiwibank remains in government hands. But does that mean that Kiwibank won't be privatised - and bought by a big "Aussie bank", possibly the ANZ?

Only time will tell.

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