The Westpac Banking Corp (ASX: WBC) share price will be one to watch on Thursday.
This follows the release of an update on its New Zealand operations this morning.
What did Westpac announce?
In March, as part of Westpac’s fix, simplify and perform strategy, the bank revealed that it has been actively considering the businesses it operates in.
One of those businesses was the Westpac New Zealand business. It advised that it was assessing the appropriate structure for its New Zealand business and whether a demerger would be in the best interests of shareholders.
At that point, the company was in the very early stage of this assessment and no decision had been made. It noted that Westpac NZ was a valuable part of the Westpac Group and had been for over 160 years. However, given the changing capital requirements in New Zealand and the RBNZ requirement to structurally separate Westpac’s New Zealand business operations from its operations in Australia, it felt it was time to assess its options.
Westpac to keep the NZ business
This morning Westpac revealed that it has decided to retain its 100% ownership of the Westpac New Zealand business and will not proceed with a demerger.
Westpac CEO, Peter King, said: “After a detailed review, we believe a demerger of the WNZL business would not be in the best interests of shareholders. Our review identified opportunities to improve service for customers and value across the WNZL business and we will progress these with the WNZL Board and management team.”
“WNZL is a strong business that has been serving New Zealand for 160 years. We remain committed to delivering for customers and fulfilling our purpose of helping Australians and New Zealanders succeed,” Mr King added.
Westpac will now focus on finding a permanent replacement for its NZ CEO, David Mclean. The bank previously revealed that Mr Mclean is retiring on 25 June 2021. Simon Power, General Manager Institutional and Business Banking, will act as CEO from tomorrow.