Westpac Banking is set to reduce its footprint in the Pacific region by selling its banking operations in five Pacific Island nations to the Bank of South Pacific (BSP) in a deal worth A$125m ($99m).
The company’s decision to sell its operations in Samoa, the Cook Islands, the Solomon Islands, Vanuatu and Tonga is aimed at focusing on its largest markets in the region.
The transaction, which is subject to necessary statutory, regulatory and third party approvals, is expected to be completed in mid-2015 and would enhance the company’s return on equity in the pacific region.
Westpac is said to retain its operations in Papua New Guinea and Fiji.
Westpac Pacific’s parent division Westpac Institutional Bank chief executive Rob Whitfield said: "Our decision to sell our operations in these nations reflects our desire to increase focus on our growth plans in the larger markets of PNG and Fiji, where we have a strong history.
"These markets support our international aspirations by being closely tied to Asia, Australia and New Zealand and the strong flows of capital, trade, and migration."
Westpac will continue to own as well as manage banking operations in the countries prior to completion of the transaction. It further plans to expand its infrastructure and capability in the region where it sees opportunities.
Pacific-originated bank BSP has operations in PNG, Fiji and Solomon Islands and headquarters in PNG.
Image: WBC headquarters in Sydney, New South Wales. Photo: courtesy of Merbabu