Kina Bank’s acquisition of Westpac Bank’s operations in the Pacific once done, will see the bank expand its operations as par it’s 2025 strategy to become a leading full service regional bank in the Pacific Region, with a market leading digital platform.
Kina Securities Limited (Kina or Kina Bank or the Company) announced this week that it has entered into sales and purchase agreements to acquire 89.91% of Westpac banking operations in Papua New Guinea (PNG) and 100% of Fiji Westpac Banking Corporation.
The Kina Bank in a statement said its customer base, employers, branches, ATMs, Net Loans, and EFTPOS terminals will increase very significantly once the acquisition process is complete.
Westpac Bank also confirmed this week of the acquisition of its operations of up to $420 million (K1, 036 million) by Kina Bank.
Westpac’s Group Chief Executive, Special Businesses & Group Strategy, Mr. Jason Yetton, in a statement said that it is the Group’s strategic decision to focus on the banking businesses in Australia and New Zealand.
“We are taking another step in becoming a simpler, stronger bank while ensuring a high standard of banking service is maintained for our Pacific customers, as well as providing opportunities for our people,” said Mr. Yetton.
The sale price is made up of $315 million payable at completion and $60 million to be paid six-monthly over the following 18 months for Westpac PNG. The sale price also includes earn-out payments of up to $45 million which are scheduled to occur annually over 24 months following completion and are subject to the business performance of Westpac Fiji.
It is expected there will be an accounting loss on sale of approximately $230 million including a Foreign Currency Translation Reserve (FCTR) loss which will be based on exchange rates on completion.
The acquisition of the Westpac Bank’s Pacific businesses supports Kina’s strategic objectives to deliver greater value to customers and shareholders by developing a more resilient and sustainable group.
Meanwhile, the completion of the acquisition, which is expected by 30th September 2021, is conditional on securing regulatory approval in both PNG and Fiji. The process to secure the approvals in PNG and Fiji is now underway.