13 August, 2010

Australia Bank Mergers & Acquisitions (Westpac Banking)

Photo: A Westpac branch in Hay, New South Wales, Australia.

With special thanks to Giles Martin of New South Wales, Australia and of Ohio, United States of America, for allowing me to use his photo. You can see Mr. Martin's photostream via this link:


Westpac Banking Corporation

Westpac Banking was born in 1817 when the Fifth Governor of New South Wales signed a charter to establish the Bank of New South Wales, Australia's very first bank. Between the year 1788 when the first fleet carrying British convicts arrived in Australia and 1817, the colony lacked a standardized monetary system. Rum, promissory notes, British treasury bills, foreign coins and bartering were all used to settle transactions. The unreliable and inefficient system often led to disputes, confusion and corruption. One of the main goals of the creation of the new bank was to establish a monetary system and provide basic banking services.

In 1821, just four years into its establishment, the Bank of New South Wales suffered a serious blow when it was discovered that its Chief Cashier had stolen half the bank's prescribed capital. But the bank survived the crisis and the subsequent Banking Crisis of the 1840s, during which many of the bank's competitors failed. In the 1850s, the Bank of New South Wales enjoyed exponential growth after gold was discovered in New South Wales and Victoria.

Thanks to its cautious management, the Bank of New South Wales survived the two World Wars, as well as the Great Depression of the 1930s. In 1982, the Bank of NSW merged with Victoria-based Commercial Bank of Australia (CBA) and became the country's biggest bank at the time. It also changed its name to Westpac Banking Corp.

Recent transaction(s):

  • In 1995, Westpac bought Challenge Bank in Western Australia.
  • In 1996, Westpac acquired Trust Bank New Zealand.
  • In 1997, Westpac bought Bank of Melbourne.
  • In 2008, Westpac Banking, the No. 3 bank in Australia, agreed to take over the No. 5 bank, St. George Bank Ltd. in an AUD $18.6-billion all-stock deal (USD $17.5-billion, Eur 11.31-billion). The enlarged Westpac will become the No. 2 bank in Australia. St. George Bank was founded in 1937 as St. George Cooperative Building Society and became a full-service bank in 1992. At the time of the takeover, St. George Bank operated more than 400 branches. Australia has a long-standing policy to prohibit its Big Four banks (ANZ Banking, National Australia, Westpac and Commonwealth Bank) to merge with each other. Westpac's purchase of the largest bank outside of the Big Four group raised some anti-competitive concerns in Australia, but it was approved without much of a challenge from the banking and competition authorities.
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