BSP promises job security for Westpac staff
BSP Bank promise job security for Westpac employees in planned June merger-acquisition.
The Bank South Pacific says it is hoping to make a return of 10-15 percent on its purchase of Westpac operations in five pacific island countries.
BSP is set to pay 125 million Australian dollars for Westpac banking operations in Samoa, Cook Islands, Solomon Islands, Vanuatu and Tonga.
The sale is to take place in June providing both banks can obtain the necessary statutory, regulatory and third party approvals.
Bank South Pacific's Deputy Chief Executive, Johnson Kalo told Koroi Hawkins expansion has always been the vision for BSP.
JOHNSON KALO: The sale is a part of BSPs pacific expansion strategy which has been ongoing since 2006 when BSP first ventured into Fiji with the acquisition of the Hubbie Bank. Was followed by the National Bank of Solomon Islands being acquired in 2007. And then again in Fiji when the colonial bank the CBAs former subsidiary was acquired there.
KOROI HAWKINS: And it's a lot of money, it's Australian 125 million. That's a big investment, what are the returns BSP expects and how long will it take to actually see any returns from this investment?
JK: These investments currently make fairly competitive returns at the moment in the region of 10 to 12 percent on equity per annum we expect, with our additional work and synergies that we can extract from the operations, we expect to improve those return numbers to say, around about 15 percent.
KH: What's going to happen to Westpac customers and staff of Westpac branches that will be acquired?
JK: The strategy is that there will be minimal disruptions, we tend to acquire and adopt a business as it is, we don't intend to make any disruptive changes. So customers shouldn't experience very much change in their interactions with their bank. In terms of staff, BSP is intent that staff will continue to be employed in those branches and subsidiaries as the have been employed at Westpac with all there conditions and terms intact.
KH: Sorry I just have to ask, why did Westpac agree to sell these branches? Is it losing money is it part of, is it reducing it's footprint in the region? Although its statement says that it wants to support more in the Pacific it seems it's going backwards in this regard?
JK: Westpac obviously from its own media statement it has its own strategic reasons for the sale and there head of institutional banking which is responsible for Westpac pacific has referred to it in their media statement. If I can paraphrase that they have just chosen or made a strategic decision to focus on their operations in Fiji and Papua New Guinea which they feel gives them more strategic focus for the business flows into their core Australian business.
KH: Finally any other Pacific Island countries in your sights going forward?
JK: We are always on the, you know looking out for opportunities in the pacific island region, so we are constantly on the look out I, there's no specific targets at this stage, but should opportunities arise I will certainly look at them.
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