Westpac mulls sale of New Zealand business
Tougher capital rules from its Kiwi peers and amid a review into its governance practices, Westpac will review its 160 year-old New Zealand business.
In a statement on Wednesday, Westpac said that given the changing capital requirements across the ditch, and New Zealand’s central bank’s requirement to structurally separate Westpac’s NZ business operations from its operations in Australia, the bank believes “now appropriate to assess the best structure for these businesses going forward”.
The bank is considering a demerger of the business.
The bank said that the decision is also consistent with Westpac’s “simplify and perform” strategy.
In March, the bank announced that it would merge its consumer and business divisions.
Westpac said that it would also consider the impact of the Reserve Bank of New Zealand’s (RBNZ) reviews announced also on Wednesday.
“We have experienced ongoing compliance issues with Westpac NZ over recent years, most recently involving material failures to report liquidity correctly, in line with the Reserve Bank’s liquidity requirements,” RBNZ deputy governor and general manger of financial stability Geoff Bascand said.
“Furthermore, the bank has continued to operate outside of its own risk settings for technology for a number of years.”
The bank said it was in the early stages of the review and will announce further updates.