Rivals win approval for merger

Source: Agencies  |   2008-10-24  |     NEWSPAPER EDITION

AUSTRALIA'S federal treasurer yesterday approved the merger of rival banks Westpac Banking Corp and St George Bank Ltd, paving the way for the formation of the country's largest bank.

Treasurer Wayne Swan said his approval included strict conditions to guarantee "the best possible outcome" for customers and employees of both banks.

St George, Australia's fifth-largest bank, agreed in September to a A$17.3 billion (US$14.4 billion) takeover proposal by larger rival Westpac.

"This decision follows a thorough assessment of its impact on national interest, including factors such as competition, economic efficiency, prudential requirements, financial system stability, community banking needs and the impact on Westpac and St George customers and employees," Swan said.

"With the conditions I am imposing, this decision strikes the right balance between enhancing the competitiveness and the strength of our banking system," he said.

The conditions require Westpac to maintain the current number of Westpac and St George branches and ATMs, as well retaining banking brands operated by each bank and keeping dedicated management teams for retail banking at each bank.

Swan's decision follows assessments by government commissions and regulation bodies. The merger still requires the approval of St George shareholders. Australia's competition watchdog, the Australian Competition and Consumer Commission, will not oppose the merger.