Westpac might be stuck with the remainder of its South Pacific banking operations after the most logical buyer was finally ruled out by the PNG competition authorities.
The bank announced Tuesday morning that the PNG’s competition regulator had confirmed its draft ruling denying clearance to sell Westpac’s 89.91% stake in Westpac Bank PNG Limited – to ASX-listed Kina Securities Limited for up to $420 million.
Westpac had been looking to sell both its Fijian banking business and its stake in Westpac PNG to Kina Bank.
The sale of the stake in Westpac PNG to Kina Bank has been blocked but the attitude of Fijian authorities hasn’t been made public, so that sale remains in limbo.
There wouldn’t seem to be anything for Kina Bank to be interested in Fiji alone.
Westpac had sold its operations in Samoa, the Cook Islands, the Solomon Islands, Vanuatu and Tonga to Bank South Pacific for $125 million.
In July, Papua New Guinea’s Independent Consumer and Competition Commission (ICCC) released a draft determination indicating it proposed to deny authorisation to Kina Bank for the proposed acquisition.
Westpac had announced the proposed sale in early December, 2020.
The ICCC has now released its final determination confirming it has denied authorisation.
“Westpac acknowledges the ICCC’s determination and will continue to operate these businesses while it reviews the impact on the sale to Kina Bank,” the bank said in the short statement to the ASX.
The proposed sale was part of Westpac’s strategy to simplify and focus on banking in Australia and New Zealand.