St George Bank has progressed on its path to merge with Westpac Bank after both companies completed due diligence talks yesterday.
The boards of both Sydney-based banks have signed a merger implementation agreement.
They have also unveiled further details of their proposed wealth management business for the merged company, in a statement to the Australian Securities Exchange (ASX).
St George and Westpac would have a “stronger wealth capability” and the Australian market place would benefit from “common back office infrastructure”, the statement said.
Westpac and St George would together have $42.9 billion in funds under management (FUM) and $75.7 billion in funds under administration (FUA).
An operating model within the statement showed that Westpac’s majority-owned spin-off, BT Investment Management (BTIM) would be the investment manager for the merged entity.
It was unclear whether St George backed Advance Asset Management would have an investment management role or whether its team would be combined with BTIM.
Products would be designed by Westpac-owned BT Financial Group, BT Investment Solutions and Advance Asset Management.
Distribution and advice would be handled by Westpac Financial Planning and BT/Westpac-owned Magnitude Financial Planning as well as St George Financial Planning and Securitor; the dealer group it owns.
Westpac and St George together would form the industry’s third-largest dealer group with 1124 financial planners with 648 practices, according to data from the latest IFA Dealer Group Survey.
Westpac’s shares climbed 17 cents or 0.75 per cent to $22.68 in trading yesterday while St George rose 19 cents or 0.60 per cent to $32.51.
National Australia Bank chief executive John Stewart and Commonwealth Bank of Australia chief executive Ralph Norris have indicated they would not rule out a bid for St George; a company founded initially as a building society in 1937.
