Chair David McLean said the reinvestment would give Kiwibank extra resources to focus on its core banking business. Photo: Kiwibank
Kiwibank is getting a $225 million cash injection to speed up growth.
The bank's state-owned holding company, Kiwi Group Capital, has agreed the proceeds of the sale of its former investment and insurance businesses should be put back into the bank.
Chairperson David McLean said the reinvestment would give Kiwibank extra resources to focus on its core banking business.
"This investment generates long-term value for shareholders and is well-aligned with KGC's strategic objective to help Kiwibank provide a competitive banking alternative for New Zealanders."
Chief executive Steve Jurkovich said the new investment was significant and a vote of confidence in its future.
"This capital injection will enable Kiwibank to continue to deliver on its growth ambitions by supporting Kiwis with their home ownership aspirations and backing local businesses to thrive."
Kiwibank was New Zealand's fifth-biggest bank, but trailed a long way behind the four main Australian-owned banks in size and market share.
The government took direct ownership of the bank last year after it rejected a bid by one of its shareholders, the Super Fund, for possible private sector investment.