Westpac to retain New Zealand business

[BENGALURU] Australian lender Westpac Banking Corp said on Thursday it would retain full ownership of its New Zealand business, after a review found that a demerger would not be in the best interests of its shareholders.

Seeking to safeguard the New Zealand banking system, the country's central bank has been separating operations and capital of local units from its Australian parents.

This prompted expectations that Westpac could divest its operations in New Zealand to escape the increasingly tighter regulatory requirements.

In its brief statement, Australia's second-largest lender said it would work on potential opportunities identified in the review to improve value across the business, but did not elaborate further.

The priority would be to finalise the appointment of a new chief executive to replace the unit's boss David McLean, who is set to retire on June 25, Westpac said.

Westpac's New Zealand unit represents about 10 per cent of its earnings and credit exposure. According to audit firm KPMG, it was expected to be valued at over A$10 billion (S$10.20 billion).

The units of the Big Four - Australia and New Zealand Banking Group, Commonwealth Bank, National Australia Bank, and Westpac - dominate over 85 per cent of the New Zealand banking market.

REUTERS