Photo Credit: PNG Buzz
Should the deal be authorized by the ICCC, Kina Securities Limited's position on purchasing Westpac PNG remains on the table, with a discussion of more competition in the banking market.
The bank recently met with the Independent Consumer and Competition Commission to explain its acquisition plan for Westpac PNG.
Greg Pawson, the company's CEO, pledged a K25 million investment in technology and digital innovation, as well as a 50 per cent expansion of Westpac PNG's branch and in-store network in the first three years following the purchase, and the creation of a pan-Pacific bank based in PNG.
“We will expand the distribution footprint of banking services across PNG to reach more Papua New Guineans,” said Pawson.
“We will retain the existing Westpac corporate structure, banking licence, operations and technology – and simply rebrand as East-West Commercial Bank.
“This exciting new bank brand will also be used for Westpac Fiji and positioned as PNG’s international bank brand.”
According to him, East-West Commercial Bank will compete directly with Kina Bank under this multi-brand approach, which is popular in many countries and will provide clients with a full range of competitive, innovative financial services.
“Expanding the distribution footprint will ensure more competition in locations across PNG which are currently only served by one bank or not at all.
“It’s a huge commitment to reinvigorate financial inclusion,” said Pawson.
Kina also sees the possibility of obtaining banking licenses in Australia and Singapore in the longer term, which would increase PNG's access and reach in the area.
Pawson proposed seven important and substantial public benefits to enhance competition, improve access, and create more jobs for Papua New Guineans in his speech.
“Kina will prevent job losses and retain all existing Kina Bank and Westpac employees.
“We will create 50 new PNG based jobs within the first 12 months following the acquisition,” he said.
“All of Westpac PNG’s existing senior management and executive positions will be nationalised and given to PNG local talent, including the country head position.”
Kina Bank's purpose, according to Kina Securities chairman Isikeli Taureka, is to continually increase the prosperity of the people, communities, and markets it serves.
“We strongly believe that this transaction should be approved by the ICCC,” he said.
Taureka also took the opportunity to address head-on the contention by the ICCC that the acquisition would lead to tacit collusion and reduce competition:
“While the concepts of a duopoly and tacit collusion will be addressed in detail in our final economic and legal submissions, the significant disparity in market positions between Bank South Pacific and Kina indicate that such a result is impossible.
“This transaction is in the best interests of the people of PNG, and the banking and financial services industry more broadly.
“The significant public benefits to PNG will be entrenched in the binding commitments by Kina Securities Limited, and enable increased competition with the current dominant force,” Taureka said.
Reference:
Post-Courier (17 August 2021). “Kina Adamant On Westpac Takeover”.
