AMP has reached agreement to buy the retail banking business of Citibank in New Zealand as it prepares to launch its own bank.
Currently AMP is in the process of seeking a banking licence from the Reserve Bank. It hopes to have this by the end of the year, and to roll out its products and services in early 1999.
AMP Bank in New Zealand will be a branch of its Australian parent company.
The Citibank purchase adds more than $400 million in mortgages to the $1 billion mortgage portfolio AMP has already built up, primarily through Ergo. Also it will pick up another $100 million in retail deposits.
AMP Bank chairman Ray Greenshields describes the purchase as "a good strategic fit" for AMP.
The company says the move into banking is part of its strategy of being an integrated financial services business, plus it will help it build stronger relationships with customers.
The bank will initially have a retail focus, concentrating on a wide range of banking services to the general public. It will continue to offer services to rural and commercial customers that have already been established by AMP/Ergo.
Distribution and delivery of products will be through a range of channels including phone, fax, AMP advisers, mobile managers, brokers, ATM, EFTPOS and the Internet.
AMP has, in Australia, reached an agreement with National Australia Bank (Bank of New Zealand's parent company) to access its ATM and EFTPOS networks. It is also planning an alliance with another, as yet, unnamed bank. It has also forged a relationship with American Express.
The Citibank acquisition is subject to all the necessary regulatory approvals and consent. It will be transferred to AMP once a banking licence is in place.
AMP has reached agreement to buy the retail banking business of Citibank in New Zealand as it prepares to launch its own bank.