BankWest in A$2.1b takeover bid from CBA

The West Australian article here.



Premier told BankWest jobs to stay in WA

8th October 2008, 17:30 WST

Premier Colin Barnett said today he had been reassured BankWest staff levels across WA would not be affected by the proposed $2.1 billion takeover bid by Commonwealth Bank.

In a media statement, Mr Barnett said he had spoken with Commonwealth Bank chief executive officer Ralph Norris, who had given a commitment regarding staffing levels and an assurance that BankWest would continue to operate independently of the Commonwealth Bank, with its headquarters to remain in WA.

Mr Barnett said the commitments would give BankWest greater strength and return the bank to Australian ownership.

He said any questions relating to competition would be addressed by the Australian Competition and Consumer Commission when assessing the purchase proposal.

Mr Norris this morning announced plans to buy BankWest and St Andrew’s Australia from their UK based parent HBOS provided the proposal passes all competition, regulatory and government approvals.

He said BankWest was a quality asset which had been made available on attractive terms, from troubled UK mortgage giant HBOS.

“BankWest provides a significant opportunity to further develop the group’s business in the fast growing WA market,” he said in an announcement this morning.

“It complements our existing operations and will deliver additional growth opportunities in key market segments, as well as enhanced product and service delivery opportunities for customers.”

Despite Mr Barnett’s comments, the Financial Sector Union has warned that WA jobs were likely to be the first to go if Bankwest was taken over by Commonwealth Bank.

The Bank of Western Australia Act 1995 stipulates BankWest’s head office, managing director and core functions must remain in WA.

The company, founded as Agricultural Bank of Western Australia, will be only a drop in the ocean for Commonwealth Bank’s overall market capitalisation – with the $2.1 billion purchase price not requiring the approval of CBA shareholders.

According to the Australian Prudential Regulation Authority, BankWest holds 4 per cent of Australia’s total lending market share and 4 per cent of all home loans, dwarfed by CBA’s 21 per cent and 20 per cent stakes respectively.

CBA holds $365 billion in loans and advances, $262 billion in customer deposits and $185 million in funds under administration – dwarfing Bankwest’s $55 billion in loans, $37 billion in deposits and $2 billion under administration.

Commonwealth also has 10 million customers to BankWest’s 900,000, and employs 39,600 people – leading to speculation that the jobs of BankWest’s 5,000 employees may be under threat.

While CBA has committed to retaining the BankWest brand in WA, an investor pack released by the bank this morning says it plans to streamline administrative functions, systems and processes of the banks where synergies exist.

CBA will also review BankWest’s recent east coast retail expansion strategy, and look to integrate the St Andrew’s Australia insurance and investments arm into its insurance operations.

BankWest is a market leader in WA, with its 100 branches across the state dwarfing CBA’s 77, ANZ’s 81 and National Australia Bank’s 72.

Only the combined operations of Westpac and St George Bank had more, at 107.

BankWest also has more Automatic Teller Machines in the State – 366 to CBA’s 275 – and 28 business centres to CBA’s 10.

PERTH
JAYNE RICKARD AND ANDREW HOBBS



Image credit here.

Post Date: 8 Oct 08