S&P gives thumbs-up to merged St George/Westpac
Standard & Poor’s Ratings Services (S&P) has removed St George Bank from ‘CreditWatch’, raising its ratings to ‘AA/A-1+’ from ‘A+/A-1’ after shareholders approved St George’s merger with Westpac Banking Corp.
Ninety-five per cent of St George shareholders approved the proposed merger at a Share Scheme Meeting held yesterday in Sydney.
The bank’s chairman, John Curtis, said in his remarks prior to the vote that St George’s board was conscious of market volatility in financial institutions and credit markets globally and that it was inevitable St George would eventually be taken over by one of the large banks.
He said if the merger with Westpac did not proceed, St George’s share price was likely to take a substantial tumble from its current levels and that staying independent was likely to “deliver less value over the medium term”.
S&P anticipates that within one to two years, St George and Westpac will be operating as a single authorised deposit-taking institution, which will result in costs savings for the institutions.
Despite such expectations, Curtis emphasised Westpac’s commitment to retaining St George’s brand. “We are very pleased that under the proposal, the St George brand and branch network will be maintained, along with a corporate presence in Kogarah [St George’s headquarters],” Curtis said in a group statement to the Australian Securities Exchange.
Before the vote, Curtis admitted there would be job losses as a result of the merger, primarily in the “back-office and head office functions”, but said the merger “is about retention and the growth of the St George culture both inside St George and Westpac”.
The schemes are scheduled for implementation on December 1, 2008.
Recommended for you
Advisers at DOD Bookkeeping, which received an $11 million penalty last week, received as much as 40 per cent of their remuneration via a bonus when clients purchased a property via a SMSF, according to court documents.
Private wealth manager Escala Partners has launched an end-to-end investment platform to strengthen its alternatives capability as clients seek sophisticated vehicles.
Perpetual Wealth Management has hired two advisers from Ord Minnett as part of five hires, just weeks after the rival firm announced it had picked up six from Perpetual Private.
ASIC has cancelled the AFSL of a Perth financial services firm following payments to its clients by the Compensation Scheme of Last Resort after a failed managed investment scheme.
