MELBOURNE, AUSTRALIA >> Westpac Banking Corp. is continuing talks to purchase some of Bank of Hawaii's South Pacific assets, according to brokerage firm Credit Suisse First Boston. Westpac may have
competition for Bank
of Hawaii’s assetsRival Australian bank ANZ
also could bid for the South Pacific
holdings, an analyst saysBridgeNews
Banking analyst Hugh Maxwell-Davis said Westpac Chief Executive Officer David Morgan confirmed yesterday that talks were taking place between the two banks.
"The acquisition of some Bank of Hawaii South Pacific Assets would complement Westpac's existing Pacific banking operations," Maxwell-Davis said in a note to clients.
He warned, however, that rival Australian bank, ANZ Banking Group Ltd., could also be interested in the South Pacific holdings.
Westpac's Pacific operations currently comprise 55 outlets and 1,083 staff across nine Pacific Island nations.
The division had Aus $840.8 million in assets at the end of September and reported an after-tax profit of Aus $31.1 million for the year ending March.
Just last month, Westpac's Morgan told analysts he would be "very interested" in additional Bank of Hawaii assets after earlier this year purchasing majority stakes in the Bank of Tonga and Pacific Commercial Bank of Samoa from the troubled Honolulu-based bank
Bank of Hawaii's remaining South Pacific assets consist of investments in Banque de Tahiti in French Polynesia; Bank of Hawaii-Nouvelle Caledonie in New Caledonia. It also has interests in Papua New Guinea, Vanuatu, Fiji and American Samoa.
In April, Bank of Hawaii's parent company, Pacific Century Financial Corp,. said it would shed a third of its assets and slash more than 1,000 jobs over the next two years as part of a full-scale strategic revamp to restore its battered balance sheet.
In the same month, Bank of Hawaii sold its 17 percent stake in Australian regional bank, Bank of Queensland, to privately owned Australian logistic company, Linfox, for an undisclosed amount.
Bank of Hawaii has been shunned by investors since late 1997 after its efforts to focus on the Pacific and Asian markets generated disastrous losses and shrinking profits.
In late April, the bank reported first-quarter earnings of $31 million, or 38 cents a share, with operating earnings per share down 16 percent to 42 cents excluding $3 million in one-time items.
Westpac shares closed steady on the Australian Stock Exchange on today at Aus $14.13. Pacific Century's stock closed up 27 cents today to $25.25 on the New York Stock Exchange.