(Bloomberg) -- New Zealand lender Kiwibank could become the fourth-biggest player in the nation’s home-loan market within five years if it continues to outgrow its rivals, according to Chief Executive Officer Steve Jurkovich.
In recent quarters Kiwibank has taken around 25% of new home loans and is growing its portfolio by about 9% a year, which is more than twice the pace of its larger rivals, Jurokovich told a parliamentary select committee Wednesday in Wellington.
“If we carry on that trajectory, in five years time we will have done what we’ve done in the last five years, which is double,” he said. “If the other big banks continue to grow quite slowly like they are now and we continue at that pace, we would be bigger than BNZ in five years in the home-loan book.”
BNZ, a unit of National Australia Bank, is one of the four Australian-owned lenders that dominate the New Zealand banking market. Finance Minister Nicola Willis wants government-owned Kiwibank to be a disruptor in the market to shake up its rivals and boost competition, and last week announced plans to pursue a NZ$500 million ($288 million) capital injection.
Such an injection “would give us a really clear pathway,” Jurkovich told the committee, which is conducting an inquiry into banking competition.
“If we had NZ$500 million we could keep growing at our current rate, which is twice as fast as the market, for at least three or four years,” he said, adding that if the capital doesn’t arrive “we will have to dial back our growth.”
The parliamentary inquiry had its origins in complaints from farmers that banks were setting rural interest rates too high and using that income to compete for home loans. Kiwibank has no presence in the farming sector and that is unlikely to change any time soon, Jurkovich said.
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