Friendly Kiwibank finds its niche

By PAULA OLIVER

A year ago this week the Herald opened a Kiwibank account - so naturally we went back to see what had become of our money.

It was still there.

In fact, the friendly man at the Greytown branch revealed that our modest deposit, made on the bank's first day of operation, had not changed at all.

It was no bigger, nor any smaller.

It had avoided monthly bank fees and monthly interest payments alike. Had we put the $50 under a mattress and forgotten about it, the result would have been the same.



Since being launched by smiling politicians - none prouder than zealous promoter Jim Anderton - Kiwibank has grown to 280 branches.

It has made its biggest impact in four spots where it is the only bank in town - Kawakawa (pop 1401), Darfield (pop 1362) and the Wairarapa towns of Featherston (3423) and Greytown (2814).

When the Herald called at the Greytown branch yesterday to get a feel for Kiwibank, we found operator James O'Kane hard at work.

A local woman wanted to open accounts for her children and was interested in the fees that would be charged. She would be back, she said, with the documentation required.

Greytownites have embraced their Kiwibank.

Many of the population are pensioners, who prefer to go into a branch to do their banking.

There is one ATM in town, but it has not caught on with all the locals.

"They like having cash in their hand. It's the fees and the fact that they can come to a branch - that's what's bringing them in," Mr O'Kane said.

He should know - he greets most of his customers by their first name.

In fact, Mr O'Kane was opening accounts for them at a rate of up to 50 a week during the first month of operation. It has now slowed to between five and 10 a week.

He has about 250 accounts on Greytown's list, and neighbouring Featherston has 500.

Unfortunately, Greytown's Kiwibank customers stayed away during the Herald's visit, so we did not get to hear why Mr O'Kane's shop was proving so popular.

But there will be ample opportunity in Featherston on March 22, when Kiwibank officially celebrates its first year of operation.

That date marks the anniversary of branches opening nationwide rather than the pilot branch which sprouted in Church St, Palmerston North, a year ago today.

The bank will also unveil its next financial result next month. That result will track progress up to last December and provide a fresh insight after the bank revealed a loss of $10.2 million in the year to June 2002.

Kiwibank's leaders do not expect to make a profit in the first three years of operation.

It is still a minnow compared with the big five trading banks by any measure except the number of branches.

At September 30 last year it had $326 million in total assets, $152 million in loans and advances, and $257 million in deposits and other borrowings.

The biggest bank, Westpac, at September 30 had total assets of $37.4 billion, loans of $31.4 billion, and deposits totalled $22.1 billion.



But Kiwibank reached its target of 100,000 customers sooner than expected, and chief executive Sam Knowles is smiling.

"I wouldn't say we're ecstatic, but we're really excited ... A lot of people said we would open the doors and no one would come. But it's going pretty much in line with what we expected."

Herald feature: KiwiBank