SYDNEY: Australia’s second-largest lender Westpac Banking Corp says it will retain its New Zealand (NZ) business, wrapping up the option of a spin-off, after a review likely found that a demerger would have been too costly.
Without providing further details, Westpac said in a statement that a review to consider a spin-off, triggered by New Zealand’s tighter capital norms, had found that a demerger would not be in the best interests of shareholders.
A decision to demerge the business could have encouraged some of its Australia-based peers who alongside Westpac dominate 85% of the New Zealand market – Australia and New Zealand Banking Group, Commonwealth Bank, and National Australia Bank – to follow its lead.
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