Sunday, November 3, 2013

KIWIBANK IS NOT A SUSTAINABLE MODEL.

 
It survives on a basis of cross subsidy, shared office front, and a very part time staff.
And Kiwiassure will be even worse.

Kiwibank is seriously under capitalised.

Many Kiwibank customers are just using it to churn their welfare cheque into cash.

The mainstream banks and savings banks are more than happy to have Kb do the benefit distribution thing as their business model operating in the real world cannot do it economically

Kiwibank has a small exposure to the lending market but it resembles a Ponzi scheme more than a commercial bank.

Kiwibank has ridden along on the coattails of NZPost but that little "blanky" has holes, is rotting and smells so bad it has no value and is in the water without a life jacket.

Kiwicullen announced the Kiwibank parent company will put 2000 employees off and I don't see any of them as Insurance sales representatives, risk assessors, claim adjusters, investment analysts, or office managers.

Kiwiassure will make the now long gone AMI look like a bluechip company.

Will any pseudo journalist make the leadership of NZLP account for how the new company will:
Assemble the significant army of people with the skills to assess risk, write policies, invest monies that will need to be placed in good investments to sustain the capital growth needed to cover the assumed risk.

In an establishment phase of such a business launch the existing companies targeted for business share will retain their talent until the new entity shows growth, sort of chicken and egg, really.

Be able to get reinsurance at anything close to what say AIG can get and be competitive.

Find the eyewatering capital needed to establish a company that will not just be a laughing stock in the world of home insurance.

One of Sods laws of business is that a once in a hundred year event  is usually accompanied by another in short time as the one in a hundred year theory is based on long term rolling averages and that is not in the Sods Law lexicon.

Come election time and the Nats will gut this carcass and hang it on a gallows but what passes for media today will listen to the bullshit and nod sagely as though it is all apples and whipped cream, when in reality it is all nuts.
By the time election 2014 rolls along the polished turd will be established and the damage done.

Another in the long list of fables perpetrated by socialism on an ignorant electorate.
The splash and the ripples are long gone before the realisation there is a dead body in the pond, is noticed

9 comments:

Edward the Confessor said...

"Kiwibank is seriously under capitalised.

Many Kiwibank customers are just using it to churn their welfare cheque into cash.

The mainstream banks and savings banks are more than happy to have Kb do the benefit distribution thing as their business model operating in the real world cannot do it economically

Kiwibank has a small exposure to the lending market but it resembles a Ponzi scheme more than a commercial bank.

Kiwibank has ridden along on the coattails of NZPost but that little "blanky" has holes, is rotting and smells so bad it has no value and is in the water without a life jacket."

You provide no evidence to support any of those declarative statements, most of which are false. This post is therefore worthless.

pdm said...

Ted - everyone in the Financial Services and Banking sectors knows that Kiwibank is undercapitalised and needs about $60million to move forward. etting rid of 2000 staff nationwide indicates it does not have a profitable customer base otherwise a large portion of these staff would be needed to service Kiwibank customers.

GD - my interpretation of what Cuniffe said about Kiwisure is that it would carry a Government Guarantee - not for this taxpayer thank you.

gravedodger said...

Mastered Cut n paste have we, that does not debate make.

Worthles s is as worthless knows, you are a legend (in your own feeble mind)

It might have escaped your notice but I regard my priviledge to post here an OPINION opportunity, and what I post are my fucking opinions, ok.
I don't need comments to feed my ego, most of them are reward enough though and yours just don't matter.

If you could read you might have discovered many economic literates see my Capitilisation claims as facts reported often, the precarious position that has Kiwibank now supporting NZPost is well documented, the profile of many of Kb clients is there to see at any city postshop as the clients use customer services to pay their bills, the statement about benefit churn is easily proved for those who do not have to have their news read out to them but have inside knowledge as to how glad the Trading Banks are in particular but also the savings banks and building societies to see Kb dealing with all that low or zero reward financial business.

All that said you do have miniscule entertainment value but not enough to prevent you getting the same visitation rights I afford to a certain whining Australian made differential.

Paulus said...

KiwiBank only exists because NZ Post have since inception poured Taxpayer's money to prop up its solvency position, which is still weak.

From my considerable 45 years full time experience Kiwi "Assurance" - a life company expression will require probably about initially a minimum of $100,000,000 to set up.
With that a business plan will have to be submitted under NZ Law to Standard & Poors and/or Moodys to get a solvency rating.
The cost of Overseas Reinsurance will have to be sought - New Zealand has cost overseas Reinsurers in the order of $20 Billion for Christchurch.
Currently it is a pariah in the insurance wholesale market - Reinsurance, as Reinsurers found that the information give to them was crap.
Whilst they have and are paying that they will penalise New Zealand for many, many years.
It is they who have led the Domestic Policy change from open ended to strict liability limits.

Psycho Milt said...

Come election time and the Nats will gut this carcass and hang it on a gallows...

Like they did to "unsustainable" Kiwibank, you mean? Oh wait, no, they kept Kiwibank, didn't they...

Edward the Confessor said...

"From my considerable 45 years full time experience Kiwi "Assurance" - a life company expression will require probably about initially a minimum of $100,000,000 to set up."

Judging from this and your previous comments Paulus, it's apparent you work in the mailroom as a favour to your poor mother.

"It might have escaped your notice but I regard my priviledge to post here an OPINION opportunity, and what I post are my fucking opinions, ok."

It's not a matter of OPINION whether Kiwibank is undercapitalised or whether other banks let it have the beneficiaries. They're claims of fact. It's my opinion that your mildly unhinged, but at least I can back that up with a substantial body of evidence.

Paranormal said...

ETC - it isn't an opinion that kiwibank is under capitalised - it's a fact.

Kiwibank went to the government earlier this year for more capital as they currently do not comply with the new Basil III standard for capital adequacy. Government quite rightly declined to provide more capital.

Edward the Confessor said...

So the government decided that in fact it wasn't under capitalised. Thanks for clearing that up.

Brick said...

Ted - cloth cap over your eyes again. What this tells Kiwibank is simply, if you want to stand in the market, provide a service that returns the cost of capital, or give it away. TSB seems to be able to exist without being subsidised by the taxpayer, but then, look at the origins of Kiwibank. Nuff said.