Keep BNZ control in N.Z.—Sir Lewis

Press, 26 September 1988, Page 10

Keep BNZ control in N.Z.—Sir Lewis

PA Auckland Selling control of the Bank of New Zealand to overseas-owned banks or corporations would be against the national interest, according to former BNZ chairman, Sir Lewis Ross. Commenting on the Government’s apparent willingness to sell the bank offshore, he said: "It is in New Zealand’s interests that its major trading bank be controlled by those whose priorities parallel those of the nation.” Sir Lewis said the public should know that, if any of the three major trading banks in this country were to win control of the Bank of New Zealand, it would have between 32 and 35 per cent of the deposit market. “Not only would such a purchase substantially concentrate power in the hands of yet another overseas - headquartered organisation, but it would also significantly reduce competition in the banking sector.”

He said the Bank of New Zealand was an “extremely valuable” part of the country’s financial infrastructure. “Should effective control pass into overseas hands, it would be detrimental to the sound conduct of the country’s economic and financial affairs in the national interest.”

The Minister of StateOwned Enterprises, Mr Richard Prebble, has said the Bank of New Zealand would require substantial injections of capital for its expansion overseas and to meet stricter international requirements. He said in July that the BNZ must become “a multinational and follow New Zealand companies around the world or lose a substantial portion of its New Zealand customers.” x Sir Lewis, an Auckland chartered accountant who retired as BNZ chairman last year, said the Government could afford to maintain “adequate funding” for the bank’s future requirements. He said that if it was decided to sell shares, the sale should permit a wide spread of domestic shareholdings with a limit on the total holding of any one buyer. “The BNZ is a sound well-managed institution and shares in the bank constitute one of the best, if not the best, of the Government’s investments.”