Bank of Hawaii’s
Pacific units sold
for $50 million

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Star-Bulletin staff

Bank of Hawaii's parent company, which has been selling assets in order to concentrate close to home, said yesterday it reached a definitive agreement to sell its operations in Papua New Guinea, Vanuatu and Fiji to Australia & New Zealand Banking Group Ltd. for approximately $50 million.

The sale by Honolulu-based Pacific Century Financial Corp. includes two branches in Papua New Guinea, two in Vanuatu and three in Fiji. Together, they have total assets of about $180 million.

As a result of the deal, Pacific Century anticipates it will free approximately $40 million in economic capital and that the transaction will result in a modest gain. The exact amount will depend upon tax considerations that include those relating to the sale of the remaining South Pacific banks that is expected later in the quarter.

"ANZ's long-standing leadership and strategic commitment to the Pacific make it a very qualified purchaser of our businesses," Bank of Hawaii President Richard Dahl said. "Bank of Hawaii will assist to the fullest extent to ensure a smooth transition for employees and customers."

The sale agreement with Australia's third-largest lender represents another step toward Pacific Century's goal of completing its previously announced divestiture program, which would return the bank's focus to its core markets of Hawaii, the West Pacific and American Samoa.

Elmer Funke Kupper, ANZ Group Managing Director Subsidiaries & International, said the acquisition moved ANZ closer to its ambition to double the size of its Pacific business.

"The acquisition consolidates an important year of strategic growth for ANZ in the Pacific," he said. "We have extended our presence with operations in three new countries -- American Samoa, East Timor and Kiribati. This acquisition strengthens our existing business by cementing ANZ's leadership positions in Papua New Guinea, Vanuatu and Fiji.

"Together these moves provide a strong platform for further growth in the Pacific -- organically in our existing markets and through potential acquisitions in new geographies. We are pleased to have been able to acquire businesses of Bank of Hawaii's quality and our growth strategy for the Pacific reflects our confidence in the region's future."

ANZ, which has 4 million retail and business customers and total assets of approximately $93 billion, has representation in 29 countries in the Asia-Pacific region, Europe and America, in addition to its main domestic markets of Australia and New Zealand.

Pacific Century had total assets of approximately $12.8 billion as of June 30.

Subject to regulatory approval and certain other conditions, the deal is tentatively scheduled to be completed around the end of the year.