A commitment to growth throughout the Pacific region has continued for Papua New Guinea-based Bank of South Pacific, with the acquisition of new Pacific operations from Westpac and launch of a new subsidiary.
Bank of South Pacific’s (BSP) regional expansion has taken a significant step forward with the acquisition of several Westpac operations in the Pacific, and the launch of a new asset finance subsidiary, BSP Finance.
PNG-based BSP has agreed to buy Westpac’s banking operations in Samoa, Cook Islands, Solomon Islands, Vanuatu and Tonga for A$125 million in a deal that continues a strategy to expand throughout the Pacific.
BSP already operates in Solomon Islands and Fiji, in addition to its main PNG business. It has a history of growing through acquisition, having bought Habib Bank’s Fiji assets in 2006, the National Bank of Solomon Islands in 2007, and National Bank of Fiji and Colonial Fiji Life Insurance Limited in 2009.
‘It is a regional strategy. We have and will continue to have a strong presence in the region for a very long time,’ BSP Chairman, Kostas Constantinou, said.
New finance arm
At the same time, BSP has launched BSP Finance, an asset finance business aimed at offering finance deals of between K20,000 and K3 million. The move will enable the bank to compete in this space with not only ANZ and Westpac, but also Credit Corporation, which BSP tried unsuccessfully to acquire in late 2013.
PNG Country Manager for the newly-formed subsidiary, Jodi Herbert, explained that BSP had identified opportunities to provide both new and existing clients with asset finance services.
‘It’s now about going back to our clients and saying that we can do this business for you as and we are keen to do it,’ Herbert told Business Advantage PNG.
‘There’s a big part of the market where this is the case.’
After launching BSP Finance in Fiji in late 2014, Herbert added that BSP Finance would also investigate introducing the subsidiary in additional Pacific countries, including those territories acquired from Westpac.
Westpac says its commitment to PNG remains unchanged despite the agreement to offload several of its Pacific operations.
PNG’s first bank, Westpac also plans to maintain operations in Fiji where for 113 years it has been the country’s longest-serving institution.
‘Our decision to sell our operations in these nations reflects our desire to increase focus on our growth plans in the larger markets of PNG and Fiji, where we have a strong history,’ said Westpac Chief Executive Rob Whitfield.
With its ties to Asia, Australia and New Zealand, Whitfield added that the PNG and Fiji markets supported Westpac’s international aspirations.
‘Indeed, we continue to see significant opportunities in both Fiji and PNG markets and will continue to invest in expanding our infrastructure and capability in the region.’
Completion of the acquisition, subject to regulatory approvals, is expected by mid-2015.