Westpac In Merger Talks With St George

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            [0] => ((WBC))
            [1] => ((SUN))
            [2] => ((SGB))
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            [0] => WBC
            [1] => SUN
            [2] => SGB
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This story features WESTPAC BANKING CORPORATION, and other companies.
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The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

By Chris Shaw

In recent weeks market speculation had suggested Westpac ((WBC)) was looking at Suncorp-Metway ((SUN)) as a possible acquisition but it emerges the bank has a different target in mind, revealing today it is in merger discussions with St George Bank ((SGB)).

The talks centre on an all-scrip deal that would create Australia’s leading home lender with a 25% market share, while it would also mean the combined entity would be the largest wealth platform provider in Australia with around $108 billion in funds under administration.

As part of the deal the bank would retain all its and St George’s existing brands and branches and with the intention to not cut branch or ATM numbers the focus of the combined group would be to invest more in front-line services. The combined bank would be expected to score an AA credit rating while the enlarged balance sheet would give it greater access to funding, a plus in the current difficult environment.

The move should come as little surprise given Westpac’s current CEO is Gail Kelly, who moved to the bank late last year after several years in the same position at St George. This also means Westpac should have a good understanding of just what it would be acquiring given Kelly has brought to Westpac some members of her former management team at St George and between them they have a detailed knowledge of the St George operations.

Any deal between the two banks would require approval from both the Federal Treasurer and a number of regulatory authorities.

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