SUNBIZ

KINA Bank Presents Its Vision For Westpac To Papua New Guinea’s Regulator

If Kina Bank’s acquisition of Westpac’s Pacific operation proceeds, it will be rebranded East West Commercial Bank, a stand-alone ‘Pan-Pacific’ bank to compete against its new parent. Kina Bank made
19 Aug 2021 11:30
KINA Bank Presents Its Vision For Westpac To Papua New Guinea’s Regulator
Kina Chief Executive Officer Greg Pawson.

If Kina Bank’s acquisition of Westpac’s Pacific operation proceeds, it will be rebranded East West Commercial Bank, a stand-alone ‘Pan-Pacific’ bank to compete against its new parent.

Kina Bank made the proposal as it tried to convince Papua New Guinea’s Independent Consumer and Competition Commission (ICCC) of the deal’s merits.

ICCC indicated it was not in favour of allowing Kina Bank’s acquisition of Westpac PNG to go ahead, citing anti-competitiveness concerns.

Kina Bank is listed with the Australia Securities Exchange (ASX) and Papua New Guinea Exchange (PNGX).

Kina Bank’s acquisition of Westpac Fiji is receiving regulatory approval.

The ICCC’s interim decision was a major setback for a deal covering both Papua New Guinea and Fiji.

Kina and Westpac had the chance to convince the ICCC to change its mind during a predetermination conference, ahead of an expected final determination by the ICCC next month.

The other entity that must approve the acquisition, PNG’s Central Bank, has said it was waiting on the ICCC determination before making up its own mind on the deal.

 

Enhancing Competition
Kina’s chairman Isikeli Taureka, and managing director and Chief Executive Officer Greg Pawson, presented a ‘vigorous’ strategy aimed at demonstrating the acquisition would actually enhance competition in Papua New Guinea’s banking sector.

Under this strategy, its existing branch network in Papua New Guinea expanded by 50 per cent in the first three years after acquisition.

 

Jobs
Existing Kina Bank and Westpac PNG staff would be retained, with an additional 50 jobs created in the first 12 months.

All senior Westpac PNG positions, including that of Country Head, would be assigned to Papua New Guineans.

Mr Pawson said the bank would give smaller banks, savings and loan societies, and non-bank financial institutions fee free access to the bank’s automated teller machines, and point of sale networks.

Mr Pawson committed Kina to making an additional K25 million (FJ$6.07 million) investment in technology and digital innovation.

 

Westpac Looks For Exit
Final submissions to the ICCC are due by August. 20, 2021.

However, whether the acquisition is allowed or not, Papua New Guinea may still find itself with just two major retail banks, as Westpac has indicated it is not interested in running a bank in PNG long-term.

“Sitting in Westpac’s portfolio, the PNG business has not been and will not be prioritised for investment or growth,” Westpac’s chief executive officer, Peter King, said.

“As a result, Westpac PNG could not be regarded as a vigorous or effective competitor now or in the future, particularly in a market with such a big number-one player [Bank South Pacific] which has economies of scale.”

Mr Taureka sought to persuade the Commission that the move to a two-bank market would not result in collusion.

 

 

Feedback: maraia.vula@fijisun.com.fj



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