Treasurer gives Westpac, St George deal green light

Westpac and St George’s merger has been given final approval by treasurer Wayne Swan.

Mr Swan said the decision followed a thorough assessment of the impact of the merger on the national interest, including factors such as competition, financial system stability and the impact on the banks’ customers and employees.

“With the conditions I am imposing the decision strikes the right balance between enhancing the competitiveness and the strength of our banking system,” Mr Swan said.

These conditions include a requirement for the merged entity to maintain the existing number of Westpac and St George branches and ATMs, all brands and dedicated management teams for St George and Westpac’s retail banking distribution.

Mr Swan said the new entity would have a larger balance sheet and capital base as well as broader access to funding markets, making it better placed to withstand systemic shocks.

Westpac’s lower funding costs would also help St George to offer lower interest rates, he said.

The merger is now subject to final approval by shareholders on November 13; the St George board has unanimously recommended shareholders vote in favour of the merger.