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Bank outlines ‘vigorous strategy’ to buy Westpac PNG

Kina Securities Limited has outlined how its proposed acquisition of Westpac PNG will benefit consumers, following opposition from the competition watchdog.

Last month, the PNG Independent Consumer and Competition Commission (ICCC) issued a draft determination stating it had competition concerns with Kina Securities Limited’s (Kina) proposed acquisition of 89.91 per cent stake in Westpac Bank PNG Ltd.

The deal was estimated to be around $420 million and is subject to regulatory approvals in both Fiji and Papua New Guinea (PNG).

In its statement last month, the PNG competition watchdog said it was “not currently satisfied that the acquisition will not, or will not likely, have the effect of substantially lessening competition in the relevant markets identified”.

The ICCC also determined that the acquisition would not result in public benefits that would outweigh detriments to the public.

Following the publication of these concerns, Kina has now put forward its “vigorous strategy” for the acquisition to the ICCC.

Represented by chairman, Isikeli Taureka, and managing director and chief executive Greg Pawson, the Kina representatives said that the deal would provide more competition in the banking sector, more innovation and more customer choice for Papua New Guinea.

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Mr Greg Pawson committed to a PGK25 million ($9 million) investment in technology and digital innovation, expanding the current Westpac PNG branch and instore network by 50 per cent in the first three years after the acquisition, and creating a pan-Pacific bank domiciled in PNG.

“We will expand the distribution footprint of banking services across PNG to reach more Papua New Guineans,” Mr Pawson said.

“We will retain the existing Westpac corporate structure, banking licence, operations and technology – and simply rebrand as East West Commercial Bank. This exciting new bank brand will also be used for Westpac Fiji and positioned as PNG’s international bank brand.”

He added that this multi-brand strategy would see East West Commercial Bank compete directly with Kina Bank, and therefore provide customers with a full range of competitive, innovative financial services.

The group also highlighted a medium-term prospect of securing banking licences in Australia and Singapore to improve PNG’s access and reach across the region.

“Expanding the distribution footprint will ensure more competition in locations across PNG which are currently only served by one bank or not at all. It’s a huge commitment to reinvigorate financial inclusion, he said.

Kina chairman Mr Taureka added: “Our mission is to constantly improve the prosperity of the people, communities and markets that we serve.

“We strongly believe that this transaction should be approved by the ICCC.”

Kina Bank bought ANZ’s retail, commercial and SME banking business in 2019.

[Related: Westpac sale of Pacific businesses stymied by ICCC]

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