ANZ 0.17% $28.63 australia and new zealand banking group limited

confirms looking at nbnz

  1. 636 Posts.
    New Zealand bank in big four's sights
    By Anthony Hughes
    July 26 2003

    The looming auction of one of New Zealand's biggest financial institutions has stepped up a notch, after London owner Lloyds TSB confirmed that Australia's big four banks were likely to bid for its National Bank subsidiary, which is potentially worth more than $6 billion.

    Lloyds TSB said on Thursday night that it had entered into discussions for the sale and as a result, several parties would be making contact with the NZ Commerce Commission in due course to discuss the ownership options.

    The commission, which is expected to publish the banks' clearance applications in the coming weeks before any deal is finalised, is likely to be concerned about concentration in the rural banking market.

    Given Australia's four major banks are the main competitors to National Bank, the statement clearly indicates some or all would be making bids.

    Bank analysts expect the winner will have to raise equity capital in what will be one of the largest capital raisings for some time, but a drawback is the winner will have a very large exposure to the vagaries of the New Zealand economy.

    The disclosure came as the favourite to buy National Bank, ANZ, revealed it had reined in its Asian expansion ambitions, abandoning discussions to take a $250 million stake in Thai Military Bank.

    An ANZ spokesman said Asia was no longer a short-term priority beyond two recently announced ventures in the Philippines and China, but that the bank would consider smaller opportunities in Asia over the longer term.

    ANZ rose 6c to $18.06 but has been under pressure in recent months as analysts cautioned about the risks of expanding into Asia.

    Thai Military Bank is now expected to be folded into a state-owned banking entity. ANZ had hoped to cordon off exposure to the bank's non-performing loans, which were around 15 per cent of assets.

    The potential investment was at odds with chief executive John McFarlane's aim during his term of lowering the risk profile of the bank, including the sale of Asian banking operation Grindlays several years ago.

    But he has recently expressed a desire to create more long-term growth options for the bank, amid concern that its strong growth of recent years is petering out.

    The spokesman said of the bank's interest in National Bank: "We have said previously we are interested. We will have a look at it and it's a well-run bank."

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