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Westpac confirms NZ sale process

Westpac Banking Corporation has confirmed that it will review a sale of its New Zealand business, citing the Reserve Bank's new capital rules as a major factor.

Thursday, March 25th 2021, 9:25AM 2 Comments

The bank has released a statement to the ASX in which it states it is "assessing the appropriate structure for its New Zealand business and whether a demerger would be in the best interests of shareholders". 

"Westpac is in the very early stage of this assessment and no decisions have been made," the Aussie banking group said.

Reports in Australia suggest Westpac has hired Macquarie to conduct a strategic review, in which a spin-off IPO and outright sale will be assessed.

Westpac said the RBNZ's new capital rules, which will require the big four to hold more tier one capital from July, is a major factor in its decision. 

It said "Given the changing capital structure requirements in New Zealand and the RBNZ's requirements to structurally separate Westpac's NZ business operations from its operations in Australia, it is now appropriate to assess the best structure for these businesses going forward."

Tags: Westpac

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Comments from our readers

On 25 March 2021 at 10:03 am Amused said:
"Westpac Banking Corporation has confirmed that it will review a sale of its New Zealand business, citing the Reserve Bank's new capital rules as a major factor."

Can't help thinking that with Australia's second-largest bank been ordered last year to pay Austrac (the financial crimes watchdog) A$1.3 billion ($1.4b NZD) in penalties for making 23 million financial law breaches in 2019 might be why the sale of its New Zealand business is been considered now.

So yes capital is probably an issue for Westpac currently but not because of the conduct of its New Zealand business.

Si
On 25 March 2021 at 4:54 pm Pragmatic said:
Like all businesses, banks aim to make money for shareholders - albeit with significantly higher leverage, higher volumes & thinner margins than many other businesses.

It's a natural reaction for any business to react the way WBC has when their future margins are threatened. The irony is that the technology that helped to preserve their margins in the nineties, has increasingly commoditised many of the core functions provided by banks.

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▲2.29 ▲2.69 ▲2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.68 2.99 3.29

Last updated: 29 July 2021 9:04am

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