Former New Zealand Business Roundtable chairman Sir Ralph Norris said state-owned Kiwibank does not have enough capital because it is under pricing its products.Sir Ralph is chief executive of Commonwealth Bank of Australian, the parent of ASB, the bank h
Former New Zealand Business Roundtable chairman Sir Ralph Norris said state-owned Kiwibank does not have enough capital because it is under pricing its products.
Sir Ralph is chief executive of Commonwealth Bank of Australian, the parent of ASB, the bank he headed for many years.
He said in an interview on RadioLive's Sunday Business show that Kiwibank was over trading.
"I think the situation for any business, if you are under pricing your products then you are not generating enough capital to grow your business and so there is always the balance between getting the pricing right in order to make sufficient profit to generate capital for the business."
Businesses that over trade do not have enough equity. They get themselves into potential difficulties because of that.
"I'm not saying that is the case as far as potential difficulties for Kiwibank but I think the issue here is you have got to make a reasonable level of profit in order to generate internal capital and that certainly that doesn't appear to be the case with Kiwibank," he said.
He said Australian owned banks have focused on getting the message across that they are there for New Zealand.
