Westpac eyes new opportunities after deciding against the sale of Westpac Fiji and Bank PNG
The banking major, led by Peter King, will ramp up its presence in the Pacific amid growth opportunities after abandoning its sale plans.
Westpac has decided against the sale of its Fiji and Papua New Guinea banking businesses, as it sees renewed opportunity for growth across the Pacific in the wake of the Covid-19 pandemic.
The banking major is now planning to expand its presence in the region as well as invest in digital services for customers, with the three-year sale process of Westpac Fiji and Westpac Bank PNG off the table.
Plans to sell its Pacific banking division kicked off in May 2020 and hit a hurdle in September 2021 after regulators in Papua New Guinea blocked a planned sale to Kina Securities for competition reasons.
Westpac’s business & wealth boss Anthony Miller told employees on Wednesday that there is renewed opportunity for growth across the Pacific in the wake of the pandemic.
“With the Pacific continuing to see growth, diversification and recovery post Covid-19 there is additional opportunity for us, and I am excited at what is ahead, as we not only consolidate, but improve our position in the local markets,” he said.
“We will also be kicking-off a new brand campaign in the coming days in both countries, confirming our commitment to the region.”
The decision to retain Westpac Fiji and Westpac Bank PNG comes after the bank warned shareholders in May about “sustained exposure to higher operating costs and higher inherent risks” related to any failure to successfully divest businesses.
At the time, it had highlighted its Pacific businesses face a number of risks, including heightened operational risk, sovereign risk, financial crime and exchange control risks which could adversely affect customers, business, prospects, reputation, financial performance or financial condition.
“A failure to divest businesses or assets could also result in interested parties taking action against the group. We may not receive the anticipated business benefits or cost savings, and the group could otherwise be adversely affected.”
Mr Miller said Westpac plans to invest to grow Pacific banking by supporting local businesses, improving digital and service capabilities for customers, working to further strengthen our risk environment and delivering leading community programs, including on financial literacy and education.
“Westpac has a great role to play in this very important region with our ability to be a strong, stable and trusted financial partner in the Pacific,” he said.
The decision to retain a presence in the Pacific comes at a time when the federal government has moved to significantly ramp up investment in the region to counter growing influence from China in recent years.
Westpac first explored the sale of its Pacific businesses in May 2020 after the initial wave of the pandemic. The $420m sale of its Fiji and Papua New Guinea banks to Port Moresby-based Kina Securities was announced in December 2020, but was cancelled in September 2021 by Papua New Guinea’s Independent Consumer and Competition Commission.
The big four banks have presence in a number of countries across the Asia Pacific, including controlling the four major banks in New Zealand. In addition, ANZ operates in America Samoa, Fiji and Cambodia and Commonwealth operates PT Bank Commonwealth in Indonesia.
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