(28th October 2003 – New Zealand) ANZ will be working overtime to retain its New Zealand business customers in the wake of its A$5.4 billion purchase of National Bank of New Zealand late last week.Surveys have indicated that NBNZ customers may show their displeasure in the bank’s sale by shifting to a rival service provider – the latest, a BRC Sherwin Chan & Walshe poll of 301 Wellington businesses, showing 51 percent of respondents said they would leave ANZ-owned NBNZ.
Analysts are also concerned that the deal could lead to churn, with one forecast indicating the combined banks could shed three to four percent of its current 34 percent market share. ANZ has also experienced difficulties in retaining its kiwi customers.
ANZ has attempted to soften the blow by stating it will retain the NBNZ brand and branch networks for the “foreseeable future” and giving the deal a New Zealand flavour by flagging an eventual listing on the local stock exchange.
ANZ chief executive John McFarlane has played down the prospect of customer churn, saying the bank took “incredible diligence” to ensure that won’t happen. He said that so far there had been little indication that customers would change banks.
The bank said it expects integration of the banks’ IT systems, back office and head office to cost some $230 million over three years; however, it aims to recoup $110 million of this through cost synergies.
New Zealand’s only local contender in the race for the kiwi bank, Black Horse Consortium, said it believed it was still in the running until Tuesday of last week. Head of the consortium, Phil Verry, said the previous owner of NBNZ, UK bank Lloyds TSB, wanted to take the money and run as quickly as possible.
He said New Zealanders had been let down by the deal.
ANZ, NBNZ and Westpac have a combined market share of more than 70 percent of the New Zealand market, according to KPMG.