Westpac will sell its Pacific businesses as it looks to further simplify its operations.
Westpac has announced the sale of Westpac Fiji and its 89.91 per cent stake in Westpac Bank PNG to Kina Securities for up to $420 million. The sale comes barely a week after the bank sold its general insurance business to Allianz for $750 million as it refocuses on core banking operations.
“We are taking another step in becoming a simpler, stronger bank while ensuring a high standard of banking services is maintained for our Pacific customers, as well as providing new opportunities for our people,” said Jason Yetton, group chief executive for specialist businesses and group strategy.
“Choosing the right purchaser for our businesses is important to us, our people and the communities we serve. We are pleased our Pacific businesses are being acquired by Kina Bank. Kina is a strong brand in the region and is well positioned with deep local knowledge to continue to help our consumer and business customers succeed.”
The sale price is made up of $315 million payable at completion and $60 million to be paid every six months over the following 18 months for Westpac PNG. It is expected there will be a $230 million accounting loss on sale due to foreign currency translation reserve loss, which will be based on exchange rates on completion.
Kina Bank was established in PNG in 1985 and is listed on both the ASX and the Port Moresby Stock Exchange. It serves retail, commercial and SME customers and offers personal banking, small business loans, financial advice and investment management.