Kiwibank cleared to raise $500m for lending growth

The government has approved the next phase of a potential $500 million capital raise to accelerate Kiwibank’s expansion, following several months of market engagement by parent company Kiwi Group Capital (KGC) and the Treasury. 

Cabinet has greenlit KGC to proceed with a private placement process targeting domestic KiwiSaver funds and institutional investors, with the transaction expected before June 30, 2026 and subject to final ministerial approval. 

Investor interest confirmed 

Finance Minister Nicola Willis said KGC had confirmed there was “sufficient interest” from potential investors to proceed, RNZ reported. 

“Allowing Kiwibank to raise up to an additional $500 million is the first step towards giving Kiwibank access to the capital it needs to truly compete with the big four Aussie banks, while retaining its intrinsic New Zealand identity,” Willis said. 

Government advice suggests the funds could support up to $4 billion in business lending or $10 billion in home lending. 

Supporting growth without selling out 

David McLean (pictured left), chair of KGC, said the government’s decision reaffirms support for a competitive, New Zealand-owned banking alternative. 

“The capital raise process aims to provide Kiwibank with capital to continue its above market growth and enhance its competitive position while ensuring all funds raised are invested into New Zealand’s future,” McLean said in a media release. “There will be no return of capital to the Crown, and no changes for Kiwibank customers.” 

The announcement follows the launch of StartUp+, a new progress-based funding solution tailored for early-stage businesses. Kiwibank says the product is designed to bridge the gap between traditional lending models and the unique needs of startups. 

Focus remains on consumer benefit 

Kiwibank CEO Steve Jurkovich (pictured right) said the bank was focused on delivering fairer financial services and challenging the status quo. 

“Delivering on our purpose of Kiwi making Kiwi better off is what differentiates Kiwibank and drives our performance,” Jurkovich said. “Any capital raise would be structured to ensure Kiwibank’s continued role to improve services and pricing for consumers. 

NZ ownership safeguarded 

Willis reiterated that Kiwibank would not be publicly listed without an “electoral mandate” and said safeguards are in place to ensure it remains majority government-owned, with most directors based in New Zealand. 

Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.