Kiwibank, the "People's Bank" conceived by Jim Anderton, posted its first annual net profit in 2005, three years after opening for business and right on schedule.
What was not predicted quite so accurately, was the strength of demand for its competitively priced banking services, served up with patriotic
garnishings on which its big Australian-owned rivals have at times choked.
Its total assets at the end of March this year were $6.6 billion, a 51 per cent increase on the previous year but still modest when compared to our biggest bank, ANZ National, with total assets of $112.5 billion.
Kiwibank's speedy growth means it continues to rely on its parent New Zealand Post for the additional capital it requires to back its increasing loan book. It cost taxpayers $80 million to start. Since then about another $260 million has been poured in, including $55 million in additional capital in the 12 months to June last year, and probably a further $30-40 million to to June this year.
"We will soon be in a position where we won't need that additional capital," says chief executive Sam Knowles. "We're pretty close to that point where our profits will be supporting growth."
Kiwibank remains a small bank, with only about a 2.5 per cent share of the market.
Last year, Kiwibank's June year net profit was $25.5 million, a 61 per cent increase on $15.8 million in 2006, which was more than double 2005's $7.2 million first profit.
But their much smaller size aside, Kiwibank's reported profits have always raised questions as to how comparable they are to those of other banks.
Sceptics say there has been no clarity over how much of Kiwibank's bottom line is from business such as bill payments, which was previously part of NZ Post's operations.
Mr Knowles says it Kiwibank's sharing of NZ Post's outlets would make any prospective sale of the bank somewhat problematic.
