Westpac's planned exit from its operations in a series of Pacific Islands nations has been hampered by the destruction from Cyclone Pam.
Westpac announced in January this year it would sell its banking operations in Samoa, Cook Islands, Solomon Islands, Vanuatu and Tonga to the Bank of South Pacific for $125 million.
However, in an announcement yesterday the bank said the sale of its Vanuatu operations will "not proceed at this time".
"Given the impact of Cyclone Pam in Vanuatu [in March 2015], the Reserve Bank of Vanuatu decided that now is not the time for a change of operators in the country’s banking sector," said a statement by Westpac.
"Westpac will continue to support Vanuatu through its recovery process, and it will be business as usual for our customers and employees."
The proposed sale of Westpac's Solomon Islands operations has also been put on hold.
"Bank of South Pacific and Westpac are continuing consultation with the Central Bank of Solomon Islands in order to obtain all necessary approvals," said the statement.
However, Westpac has announced the completion of the sale of its banking operations in the Cook Islands, Samoa and Tonga to the Bank of South Pacific for $91 million.
As announced in January, Westpac will retain its operations in Fiji and Papua New Guinea.