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Stacy Squires / Stuff
The sale of Westpac’s New Zealand division is being considered as it reassesses the future of its business in this country.
The possible sale of Westpac’s New Zealand division was a complete bombshell for the bank’s staff, according to First Union.
The union’s national finance organizer, Callum Francis, said the announcement came as a complete surprise to the bank’s New Zealand workforce of around 5,000, and members had no idea that Westpac Australia was even thinking of selling the business. .
“I can only imagine how shocked and terrible they feel about this.
“This is an extremely volatile and turbulent time for our members, no one is quite sure what the future will be like and if they will necessarily have a job.”
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A banking expert says the potential sale of Westpac is an exciting opportunity for the kiwi stock market.
On Wednesday, the bank issued a statement saying it was considering whether a spin-off would be in the best interests of shareholders as part of its “fix, simplify and carry out” strategy and that it was in the early stages of assessing the future of your business in New Zealand. .
Francis said the union would seek more information from bank management on what was planned and to ensure job security for workers should a sale occur.
“It’s going to be interesting to figure out that considering they are listed on the Australian Stock Exchange, I would be surprised if it didn’t sell to shareholders, rather than a private owner, but we haven’t had any communication from Westpac on what that looks like.
“Who and how they will sell the business to another buyer will be first and foremost in our discussions.”
David white
Westpac Bank staff in New Zealand knew nothing about the possible sale of the business and were concerned about the future of their jobs.
There would be concerns surrounding the sale to an existing New Zealand bank and Francis said that could be ruled out for competitive reasons, but the sale to a foreign buyer also raised issues.
“A private equity firm for most people involves considerable change to put it carefully and would probably make people quite anxious, so we would be working very hard to make sure that employees are protected during any kind of transition.”
Francis said they expected the Reserve Bank to be heavily involved in any purchase agreement.
“Westpac is one of the Big Four banks, so the entry of an unknown entity into the New Zealand market could cause all kinds of problems for the banking sector.”
Westpac said the decision on its future structure would also take into account the Reserve Bank’s requirement, also announced Wednesday, that Westpac pay for two independent reports on its risk governance processes.
But Francis said he did not believe the spin-off option was a “knee-jerk reaction” to the Reserve Bank’s demand to act on compliance issues, and it had clearly been in the works for a long time.
Robyn Edie / Stuff
Westpac has closed several branches in the regions and major hubs in recent years and further disruption is coming as the bank reflects on its future structure in New Zealand.
International financial consultant Geof Mortlock said that since the bank’s value lay in its customer base, Westpac had a very strong incentive to keep its customer base well-served.
“What happens in the future will depend on the rate of return the buyer is looking for and their appetite for risk.
“They may decide to reduce loans in certain areas, for example by reducing loans on high LVR mortgages or reducing loans to the rural sector.”
But Mortlock said a sale had implications for Westpac staff if the new owner wanted to restructure the business to cut costs.
The costs associated with the very high capital ratios imposed by reserve banks could deter potential buyers and encourage other New Zealand banks to consider exiting the market.
“That is certainly a factor in Westpac’s desire to sell, and it could influence the way other banks think about it, if they want to.”
Mortlock said the possibility of the Reserve Bank becoming more active in terms of policies to address the housing crisis also adds to the malaise of banks.
“I suspect Westpac and other banks are getting a little concerned about what kind of increased intrusive regulation the Reserve Bank might start to impose, not really for financial stability purposes, although they would disguise it that way, but really to help. [Finance Minister]Grant Robertson tries to reduce house price inflation. “
