Latest / Best of Business / Sam Stubbs: Simplicity co-founder on the Government's new moves to boost competition in the banking sector

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Sam Stubbs: Simplicity co-founder on the Government's new moves to boost competition in the banking sector · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News talks'd be follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Cabinet has agreed to make Kybank more competitive than' beefing
• 0:19
  Speaker 2: it up with a five hundred million dollar capital injection.
• 0:23
  Speaker 2: Queybank parent company, QWI Group Capital and Treasury have been
• 0:26
  Speaker 2: instructed to talk to potential investors. These could include Kiwi
• 0:29
  Speaker 2: sab funds, They could include pension funds, et cetera, but
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  Speaker 2: the government has ruled out selling off its Kwibank shares.
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  Speaker 2: The Finance Minister Nicola Willis is with me after six
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  Speaker 2: for now. Sam Stubbs is the founder of Simplicity, the
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  Speaker 2: Kei Saver Fund. Sam, Good Evening, Good Evening does this well?
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  Speaker 2: First of all, your reaction to the announcement.
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  Speaker 3: Oh look, I think it's a very sensible first step
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  Speaker 3: towards getting Kybank to be the bank it could be,
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  Speaker 3: which is basically as big as the Aussie banks and
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  Speaker 3: really bringing you serious competitions to the market. So first
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  Speaker 3: of all, what they need to do is raise I
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  Speaker 3: think five hundred million sounds round about the right amount
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  Speaker 3: of money, and they need to that is new money
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  Speaker 3: into Kiwibank to make it stronger. Clearly has other things
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  Speaker 3: to spend its money on, so it'll come to people
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  Speaker 3: like us and RS for that money.
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  Speaker 2: Will you invest?
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  Speaker 3: I think we're highly likely to if the price is right.
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  Speaker 3: I mean, we'll take it very seriously, because if you
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  Speaker 3: think about the banking industry, it is a profitable industry.
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  Speaker 3: Banks are good investments long term. This would be you
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  Speaker 3: would be getting an opportunity to get in early, as
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  Speaker 3: it were, and then you know you you would normally
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  Speaker 3: assume after this that the ultimately would be listed on
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  Speaker 3: the stock exchange and mum and dad kewy investors would
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  Speaker 3: get that chance as well. I do like the fact
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  Speaker 3: that they're effectively restricting it to New Zealand investors so
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  Speaker 3: that the kiwibank stays Kiwi. That makes perfect sense, and
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  Speaker 3: there's plenty of money in the market now Ryan to
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  Speaker 3: do this. You know, can we say keep you serving
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  Speaker 3: funds alone? Have got around abut one hundred and twenty
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  Speaker 3: billion dollars is.
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  Speaker 2: The five hundred million dollars floating around in the air
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  Speaker 2: to fund it?
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  Speaker 3: Oh? Look, I would thought easily. I mean, if you
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  Speaker 3: add up one hundred and twenty billion from QW Saver
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  Speaker 3: if you add up ACC, if you take NZ Super,
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  Speaker 3: that's about another hundred and twenty hundred and twenty billion dollars,
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  Speaker 3: and you've got EWI, you've got other institutional investors. So
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  Speaker 3: if the price is right, I would have thought it
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  Speaker 3: would be relatively easy to raise five hundred million dollars.
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  Speaker 3: I mean, you know, these things take time. You've got
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  Speaker 3: to go through a process. But this should be a
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  Speaker 3: good investment at the right price.
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  Speaker 2: Will you And the way you're talking makes me think basically,
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  Speaker 2: you guys will get that. Those who can, who are
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  Speaker 2: allowed to come early, will get a deal, and those
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  Speaker 2: have to wait till the stock exchange listing will pay more.
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  Speaker 3: I'll not necessarily no, I think. I mean, if it
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  Speaker 3: went if it went to a stock exchange listing, you
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  Speaker 3: know what we call an IPO, typically everyone who invests
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  Speaker 3: there it gets a good deal. You saw that with
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  Speaker 3: the power companies when they listed. So but that'll be
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  Speaker 3: years off. Ryan, Basically, basically it will take years for
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  Speaker 3: QW SAB for q bank to beef up. It does
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  Speaker 3: take time. You've got to absorb that money, you've got
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  Speaker 3: to make new loans. All that sort of stuff takes time.
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  Speaker 3: But this is a really important and I think pretty
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  Speaker 3: significant first step.
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  Speaker 2: Is your reading of it. When Nicola Willis says to
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  Speaker 2: the big banks, watch out, There'll be more to come
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  Speaker 2: unless you play ball. Is your reading of it that
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  Speaker 2: she means o listed on the stock extrain. That's the
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  Speaker 2: next sort of step if you don't buck up your ideas. Boys.
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  Speaker 1: Yeah, look, I.
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  Speaker 3: Read that slightly differently. I read that there's Look, there
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  Speaker 3: were fourteen recommendations. You're now on formal notice that you've
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  Speaker 3: got to take these things seriously make them happen. This
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  Speaker 3: is is emphatical warning as I've ever seen from from
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  Speaker 3: any politician to the big banks that unless you shape up,
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  Speaker 3: they will be trouble. And I think I mean the
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  Speaker 3: bank the big banks would be false to to to
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  Speaker 3: you know, ignore this. This is this is the Prime
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  Speaker 3: Minister and the Minister of Finds standing up and saying, okay,
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  Speaker 3: games up. Now here are the recommendations. You've got to
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  Speaker 3: make them happen. Remember, the only the only person who
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  Speaker 3: can seriously do damage to the big banks in New
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  Speaker 3: Zealand is the government because they've got they've got regulation powers.
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  Speaker 3: So I think this is a This is a really
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  Speaker 3: really formal warning to them that you got to allow
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  Speaker 3: competition in New Zealand because the Commics compistion Commics Commission
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  Speaker 3: very emphatically said that the banks weren't allowing competition.
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  Speaker 2: And Sam Stubbs Simplicity For.
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