RNS Number : 3365F
Commonwealth Bank of Australia
08 October 2008
COMMONWEALTH BANK OF AUSTRALIA TO ACQUIRE BANKWEST AND ST ANDREW'S
Sydney, 8 October 2008: The Commonwealth Bank of Australia (the Group) has acquired the
Bank of Western Australia Limited (BankWest)
and St Andrew's Australia Pty Ltd (St Andrew's) through the execution of a sale and purchase
agreement with UK based HBOS plc.
The purchase does not extend to HBOS's other Australian businesses - Capital Finance
Australia Ltd, BOS International (Australia) Ltd
and HBOS's Australian Treasury operations.
The purchase price will be $2.1 billion. The purchase is conditional on the receipt of
all necessary competition, regulatory and
government approvals - and will be completed following receipt of those approvals.
The Group is determined to continue to carry substantial surplus capital due to the
current volatile market conditions. It intends to
fully fund the purchase price by undertaking a
$2 billion accelerated institutional placement which will maintain APRA Tier 1 capital at
7.6% and Tier 1 capital under UK FSA rules at
10.1%.
Standard & Poor's, Moodys and Fitch have all confirmed the Group's credit ratings with
stable outlook post the acquisition.
Credit Suisse has served as exclusive financial adviser to the Group on this transaction.
Ralph Norris, Commonwealth Bank Chief Executive Officer said, "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. 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."
"BankWest provides a significant opportunity to further develop the Group's business in
the fast growing Western Australian 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," Mr Norris said.
BankWest is a strong business and a market leader in Western Australia. It is the
Commonwealth Bank's intention to maintain and grow the
BankWest brand.
Commonwealth Bank and BankWest branches and business centres in Western Australia will not
be closing as a consequence of this
acquisition, and both BankWest and Commonwealth Bank customers will be able to use each
other's ATMs without paying any additional fees once
our systems allow.
St Andrew's is HBOS Australia's wealth management business, providing life insurance and
wealth management products to the Australian
marketplace. Its range of products is complementary to the Group's existing wealth management
business.
The Group is strongly committed to its Australian businesses and on achieving its vision
to be Australia's finest financial services
organisation through excelling in customer service. This acquisition demonstrates this
commitment, by expanding in a rapidly growing region
of the Australian economy.
"I am confident that this acquisition will deliver significant benefits for the people and
customers of both organisations. HBOS'
Australian businesses are good quality, strong businesses underpinned by dedicated and
talented staff," Mr Norris said.
The Strategic Rationale
* Builds on the Commonwealth Bank's commitment to being Australia's leading financial
services organisation with strong positions in
home loans, retail deposits and business banking, and an enhanced position in credit cards,
personal lending and wealth management;
* Strengthens the competitive position in the fast growing and attractive Western
Australian market. The BankWest brand will be
retained;
* Provides opportunities to enhance the Group's reputation as a leader in product
innovation and customer service by further
developing existing relationships with nearly 11 million Australians; and
* Provides a wider pool of talented and experienced people to complement the focus on
achieving the Group's vision of becoming
Australia's finest financial service organisation through excelling in customer service.
Note regarding 6 October Suncorp Announcement
High level, exploratory discussions have been conducted with Suncorp.
ENDS
For further information please contact:
Media Analyst
Steve Batten Warwick Bryan
Media Relations Investor Relations
Commonwealth Bank Commonwealth Bank
0411 080 268 0406 316 725
This announcement is not an offer for subscription, invitation, recommendation or sale
with respect to the purchase or sale of any
shares in any jurisdiction. This announcement does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in the
United States or to any U.S. person (as defined in Regulation S under the U.S. Securities Act
of 1933, as amended (the "U.S. Securities
Act")). Securities may not be offered or sold in the United States unless the securities have
been registered under the U.S. Securities Act
or an exemption from registration is available.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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