(27 October 2008 – Australia) Treasurer Wayne Swan has announced the approval of the Westpac/St George merger, with a few key conditions in place.After reviewing a number of factors including the customer impact, Swan said that the decision strikes the right balance between enhancing the competitiveness and the strength of our banking system.
Swan said that the merged entity will have a larger balance sheet and capital base, as well as broader access to funding markets, making it better placed to withstand systemic shocks.
The St George banking brand will also benefit from Westpac’s lower funding costs, helping it to offer lower interest rates on loans.
Under the conditions, Westpac is required to maintain the existing number of Westpac and St George branches and ATMs, including in non-urban areas.
The conditions will also require the removal of foreign ATM fees for Westpac customers using St George ATMs and vice versa.
Westpac will also be required to retain all Westpac and St George retail banking brands including Bank SA.
Internally, Westpac will also be required to maintain dedicated management teams for St George and Westpac retail banking distribution and retain a corporate presence in Kogarah.
The conditions to which this approval is subject are valid for a period of three years after the implementation of the proposed merger.