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Speaker 1: Good news for banking competition, Well, hopefully good news for

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Speaker 1: banking competition, the government giving the green light for a

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Speaker 1: capital injection from the private sector, Cabinet approving raising half

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Speaker 1: a billion, five hundred million dollars through QYP saver funds

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Speaker 1: and investment groups with the hope of finally making the

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Speaker 1: bank competitive with the Big four of the Aussies. Claire

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Speaker 1: Matthews is Associate professor at Massi University Business School, a

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Speaker 1: banking expert. Clear, good morning, Marina iron. Is this going

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Speaker 1: to shift the dial in terms of its competitiveness? How

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Speaker 1: rgibargie it can be in market?

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Speaker 2: Well, it's sitting in to make a difference. We're talking

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Speaker 2: about increasing its capital by around seventeen percent, but in

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Speaker 2: reality it's still going to be substantially smaller than the

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Speaker 2: Big four Australian banks. It's obviously going to be able

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Speaker 2: to do more lending, and if it can do a

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Speaker 2: substantial amount more lending then it can be challenging in

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Speaker 2: terms of what it offers, but it's not going to

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Speaker 2: take it anywhere near the size of the Big four,

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Speaker 2: So the extent of which to which it will actually

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Speaker 2: impact on competition is questionable.

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Speaker 1: How do you get it there, do you need to

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Speaker 1: put it on the stock market, as Nicola Willis is

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Speaker 1: sort of indicated, is potentially an option.

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Speaker 2: We're still talking a huge amount of increase in capital

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Speaker 2: that would be required in order to get it to

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Speaker 2: anywhere like the size of the Big Four, enabling it

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Speaker 2: to grow and enabling it to do more lending. Whether

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Speaker 2: it's through this capital injection or additional capital through an IPO,

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Speaker 2: that's all going to help. But as usual, we're overstating

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Speaker 2: the competition issue in the market in my view, because

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Speaker 2: we do have a competitive market. Queibank is making a

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Speaker 2: difference as it is. Yes, it will make a bit

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Speaker 2: more of a difference if it's able to do more.

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Speaker 2: But whether we're going to see a huge change in

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Speaker 2: terms of what's happening in the banking market, I just

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Speaker 2: don't see that it's going to happen.

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Speaker 1: Is that because it's starved of capital or because we're

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Speaker 1: just a small country.

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Speaker 2: It's probably not either of those things. It is certainly

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Speaker 2: a challenge for Keevy Bank in terms of its capital

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Speaker 2: situation because in order to do leaning it needs capital

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Speaker 2: and it can only generate so much from its normal operation.

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Speaker 2: So getting more capital as a capital injection helps. We

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Speaker 2: are a small country, but that's not actually accepting a

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Speaker 2: competition issue. We have a good number of banks that

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Speaker 2: they are competing. We seem to perceive that just because

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Speaker 2: they're making lots of money that that's not competitive. That's

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Speaker 2: not necessarily the case in my view, and the challenge

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Speaker 2: is that Keevy Bank is just a small bank, and

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Speaker 2: at least you've got something a similar size to the

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Speaker 2: big four, You're not really going to have a competitive

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Speaker 2: difference with my view.

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Speaker 1: Interesting, Clear appreciate that, Clear Mathews as I said, professor

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Speaker 1: at mass University Business School.

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