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Westpac Retains Fiji And PNG

Australian Bank Westpac is staying in Fiji and Planning to invest in growth here. Although Westpac has entered into an agreement to sell its operations in five Pacific island nations,
30 Jan 2015 11:22
Westpac Retains Fiji And PNG

Australian Bank Westpac is staying in Fiji and Planning to invest in growth here. Although Westpac has entered into an agreement to sell its operations in five Pacific island nations, the bank will retain its Fijian and Papua New Guinea business.

This is despite earlier speculations that Westpac will also sell its Fijian operations and only retain PNG.

Westpac yesterday announced plans to sell Samoa, Cook Islands, Solomon Islands, Vanuatu and Tonga operations to the Bank South Pacific Limited for AU$125 million (FJ$202 million).

Fiji and Papua New Guinea were Westpac’s largest markets in the Pacific as both the longest serving bank in Fiji for 113 years and the first bank in PNG.

Completion of the sale is expected to occur in mid-2015 and is subject to the parties obtaining necessary statutory, regulatory and third party approvals.

Westpac Pacific general manager, Greg Pawson, said their decision to sell their operations reflects their desire to increase focus on their growth plans in Fiji and PNG where they have a strong history.

“These markets support our international aspirations by being closely tied to Asia, Australia and New Zealand and the strong flows of capital, trade, and migration,” he said.

“Indeed, we continue to see significant opportunities in both Fiji and PNG markets and will continue to invest in expanding our infrastructure and capability in the region.”

Westpac spokesperson, Sussana Robinson, said a testament to this commitment to growth was their recent signing of a deal with Nadi Airport.

This was to provide exclusive banking services to customers at the international terminal in perpetuity.

 

Focus and plans

“Westpac is committed to growing its presence in Fiji and testament to this is our goal of reaching one million customers in Fiji and PNG by our organisation’s 200th birthday in 2017,” Ms Robinson said.

“To fulfil this goal, we are focusing on our strategy of being Everywhere, Targeted and Strong.

“Being ‘Everywhere’ captures our financial inclusion strategy, which aims to help introduce more people to banking with low cost, innovative electronic solutions to help then bank wherever they are.

“Being ‘Targeted’ is about leveraging our competitive advantage in business transactional banking.”

She said the launch of their Corporate Online and our soon to be launched state of the art Verifone merchant terminals are testament to this competitive advantage.

Westpac will also be introducing innovative white-label solutions in a bid to become the merchant terminal of choice across the Pacific.

“We will also continue to build on our financial markets expertise to ensure that we dominate cross border relationships and trade flows,” she said.

“Being ‘Strong’ is about becoming the leading business, corporate and institutional bank in PNG and Fiji.

“We will continue to improve our risk management governance, controls and processes.

“Our sustainability agenda continues to be at the heart of our strategy and throughout FY15 and beyond we will continue to provide free financial literacy and maintain our strong focus on women.”

Ms Robinson said they see significant opportunities to boost their corporate and institutional presence in Fiji.

“We aim to meet this opportunity by expanding our Global Transactional Services (GTS) offering,” she said.

 

The sale

Meanwhile, prior to the execution of the sale, Westpac will continue to own and manage banking operations in these countries and will continue to meet its customers’ banking needs.

Following completion, Westpac will work to ensure continuity of services to customers and a smooth transition of operations in these countries to BSP.

BSP is the largest Pacific-originated bank, with operations in PNG, Fiji and Solomon Islands and headquarters in PNG.

Mr Pawson said in providing services to this region, it is vital that Pacific Islanders are supported by a bank that is an expert in operating in smaller markets.

“In reviewing the Group’s position, it was clear that BSP was best placed to maintain a high standard of banking services across these markets and in so doing, continue to support the economies in the region,” he said.

“We believe BSP is well-positioned with deep local knowledge to take the great businesses Westpac has built in these countries into the future,” Mr Pawson said.

The transaction meets Westpac’s disciplined return criteria and will improve the bank’s return on equity in the Pacific region.

The transaction will not have a material impact on Westpac Group’s financial position.

Feedback: rachnal@fijisun.com.fj

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