Date: Thursday 29th January, 2015
Chairman of Bank of South Pacific Limited (BSP), Kostas Constantinou OBE, today announced that BSP has entered into an agreement to acquire the banking operations of Westpac Banking Corporation (Westpac) in Samoa, Cook Islands, Solomon Islands, Vanuatu and Tonga for AUD $125 million.
Completion of the sale is anticipated for mid-2015 and is subject to the parties obtaining necessary statutory, regulatory and third party approvals.
Prior to completion, Westpac will continue to own and manage banking operations in these countries and will continue to meet its customers’ banking needs.
This initiative is consistent with BSP’s Pacific based expansion strategy, which has been maintained since 2006. Since that year, BSP acquire banking and financial services businesses in Solomon Islands (2007) and Fiji (2006 & 2009).
BSP is a major commercial banking and finance group across PNG, Solomon Islands and Fiji, with assets of approximately PGK16 billion representing approximately 38% of loans and 49% of deposits across those markets respectively. In PNG, the BSP Group holds approximately 50% market share in both loans and deposits. With a significant presence in PNG, Fiji and Solomon Islands, BSP’s growth potential has always been likely to come from acquisition or line-of-business investment opportunities.
BSP views itself as a major PNG and South Pacific banking and finance entity, with a strong regional business, and has pursued a diversification and expansion strategy, to seek out both geographic and business line opportunities of economic size and merit.
The country operations specified in this acquisition satisfy the geographic element of this strategy. Further, as a business domiciled in PNG, the largest South Pacific island economy, BSP has developed a strategic interest to find opportunities, build commercial relationships, and grow its presence in the economies of the South Pacific region.
The acquisition brings respected customers in the new jurisdictions, skilled employees and specialised processes and systems. It will also position BSP as a leading Pacific regional financial services business, maximising future opportunities from PNG’s growing long term trade and economic influence in the region.
BSP CEO Robin Fleming remarked that ‘BSP is committed to our customers, our people and the communities we operate in and we are proud to be the Official Sponsor of the 2015 Pacific Games’. He said that the ‘BSP Chairman and Executive will undertake a program of pre-completion visits over the next few months to introduce BSP to customers and staff in those Pacific Island Countries and make initial support representations to local regulatory authorities, emphasising that there will be a smooth transition post completion’. He further added that ‘This expansion into these island countries, positions BSP to make its mark as the preeminent bank in PNG and the South Pacific’.
The Chairman of BSP, Mr Kostas Constantinou said that BSP was pleased to have this opportunity to increase its commitment to the Pacific. ‘It is a regional strategy’ he said. ‘We have and will continue to have a strong presence in the region for a very long time. BSP is living up to its name as the Bank of South Pacific’. He further added that this is a milestone transaction not only in the corporate development of BSP, not only in the development of Papua New Guinea as an economic force in the South Pacific Island nations, but also a positive example of people of the South Pacific Island nations developing their capabilities in regional commercial and economic activities.