The Finance Minister aims to put an end to the 'cosy pillow fight' between banks and bolster sector competition.

A Commerce Commission report has found that the four big Australian-owned banks are turning high profits, far out-stripping international peers.

The Commission has recommends open banking practices and tweaks to Reserve Bank rules to ease access for small players.

Finance Minister Nicola Willis says she's exploring options to raise Kiwibank's capital. 

"I think Kiwibank needs to remain New Zealand's bank - and exactly how that's defined is one of the questions that's to be discussed during this process."

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