Westpac announced this morning that it is in merger discussions with St George Bank.
A successful merger between the two banks would create Australia’s largest financial institution, with a customer base of 10 million.
Westpac said in an announcement to the ASX that together the banks would have a strong AA credit rating, a larger balance sheet and greater funding access – which would better position both businesses to withstand challenging funding markets and “take advantage of opportunities created by the dislocation in capital markets”.
If the merger was to go ahead the combined business would be the country’s leading home loan provider, with a market share of 25 per cent.
Westpac chairman Ted Evans said both banks were highly successful but that they would be “stronger together” in a way that would allow both to “harness the strength of each while maintaining their unique identities and market positions”.
CEO Gail Kelly said the merger would also provide greater diversity and choice of products from both organisations, which would drive significant revenue growth.
More details to follow as annouced.
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