Article warns against partial privatization of NZ's Kiwibank, citing concentration, growth, foreign ownership, and moral hazard concerns.

The article cautions against partial privatization of New Zealand's state-owned Kiwibank, citing four main concerns: 1) New Zealand's banking sector is concentrated, which may not change significantly, 2) more capital may not foster growth, as Kiwibank's track record is unimpressive, 3) part-privatization may require selling shares at a deep discount, potentially leading to foreign ownership and high interest expenses, and 4) there is a risk of moral hazard and reputation damage if Kiwibank is partly privatized. The author recommends that Kiwibank should focus on strengthening its operations and market position before considering any change in ownership.

August 01, 2024
5 Articles