So the Bankwest train has halted. I got my loan from Bankwest, wonder if they will have system glitch and my loan becomes $1, well it was just an afterthought. But, with these acquisition, it does means that alot of people might loss their job due to the restructuring. Hopefully they can jump shop to Commonwealth Bank sooner than later.

Commonwealth Bank to buy BankWest

Article from: AAP

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October 08, 2008 09:41am

COMMONWEALTH Bank of Australia is to acquire the Bank of Western Australia (BankWest) and St Andrew's Australia from their UK based parent HBOS for $2.1 billion.

The nation's biggest mortgage lender said the purchase was conditional on all necessary competition, regulatory and government approvals.

The Commonwealth Bank said it would maintain and grow the BankWest brand after the takeover, and customers could make transactions at either's ATMs without penalty.

Commonwealth said it would fund the acquisition through a $2 billion accelerated institutional placement.

It said the method of funding the acquisition would allow it to maintain APRA Tier 1 capital at 7.6 per cent and Tier 1 capital under UK FSA rules at 10.1 per cent.

The Commonwealth said ratings agencies Standard & Poor's, Moodys and Fitch all had confirmed the group's credit ratings with stable outlook following the acquisition.

The Commonwealth Bank said, even with the acquisition, it was determined to continue to carry substantial surplus capital due to the current volatile market conditions.

Commonwealth Bank chief executive Ralph Norris said the purchase from the troubled UK banker, HBOS, offered rare value.

"The Commonwealth Bank regularly reviews acquisition opportunities but rarely have we seen a quality asset such as BankWest become available on such attractive terms to us," Mr Norris said.

"The strength of our current capital and funding position combined with the strategic value of this transaction makes this an attractive opportunity for the group and its shareholders."

Mr Norris said the acquisition of BankWest provided a significant opportunity to further develop the group's business in the WA market.

"It complements our existing operations and will deliver additional growth opportunities in key market segments, as well as enhanced product and service delivery opportunities for customers."

He said the Commonwealth Bank intends to maintain and grow the BankWest brand and that Commonwealth Bank and BankWest branches will not be closing as a consequence of the acquisition.

Both Commonwealth Bank and BankWest customers would be able to use each others ATM's without paying additional fees, he said.

St Andrew's is HBOS Australia's wealth management business, providing life insurance and wealth management products.

"Its range of products is complementary to the group's existing wealth management business," Mr Norris said.

Commonwealth Bank said the purchase did not extend to HBOS's other Australian businesses, Capital Finance Australia, BOS International (Australia) and HBOS's Australian Treasury operations.

Commonwealth also confirmed that it had conducted "high level, exploratory discussions" with Queensland-based banker-insurer Suncorp-Metway.

If the acquisition is successful, it will create a bigger bank than a combined Westpac-St George and would give the Commonwealth Bank the biggest market share in WA, which has amongst the highest growth rates in the country because of the mining boom.

Credit Suisse has served as exclusive financial adviser to the group on the transaction.

BankWest and St Andrew's owner, HBOS, is in the process of being taken over in the UK by rival bank Lloyds TSB Group, in a deal worth £12 billion ($29.65 billion).