Australia’s CBA may buy HBOS’ BankWest
NEW YORK (MarketWatch) — Commonwealth Bank of Australia Ltd said Tuesday it has started exclusive talks with Britain’s HBOS Plc to buy its local unit, BankWest.
Last week HBOS Australia downplayed speculation it was in talks with Australia’s local banks about selling BankWest, saying it was not interested in selling the operation, AAP said.A sale could provide much-needed capital for HBOS, which is being taken over by Lloyds TSB Group Plc
HBOS expects to retain its two most profitable businesses in Australia — BOS International and Capital Finance — Dow Jones Newswires reported, citing a person familiar with the situation.
HBOS Australia booked a 15% increase in underlying pretax profit for 2007, to A$757 million, but pretax profit in the six months to June 30 was down 12% in local currency terms to A$325 million, impacted by costs associated with BankWest’s push into more populous Eastern Australia states, according to Dow Jones Newswires.
HBOS Australia took over BankWest in 2003. Richard Wallace, managing director of Sydney-based Wallace Funds Management, was quoted in the Dow Jones report as saying a BankWest deal would make sense for Commonwealth Bank, which is currently Australia’s largest bank by market capitalization.
“Under normal circumstances it’d be a difficult transaction to do and (there) could be competition concerns, but at the moment there are assets for sale and we think it makes a lot of sense,” Wallace said.
A spokeswoman for the Australian Competition and Consumer Commission said the regulator is yet to receive any application for a takeover of BankWest, Dow Jones said. End of Story
Michael Kitchen is a copy editor for MarketWatch and is based in New York.
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