Below is a press release from the CEO of Commonwealth Bank, Ralph Norris
“Last week we announced that Commonwealth Bank will be acquiring BankWest and HBOS Australia’s wealth management business, St Andrew’s. The acquisition will create the largest financial services organisation in Australia providing its nearly 11 million customers with expanded access and distribution, leading products and great service.
Commonwealth Bank and BankWest are each very successful businesses with strong brands and a focus on customer service. Together the two businesses will be even stronger for customers, shareholders, employees and the community while maintaining our unique identities.
Commonwealth Bank and BankWest branches and business centres in Western Australia will not be closing as a consequence of this acquisition. Where there are significant overlaps in the eastern seaboard footprint we will evaluate our options and make sensible decisions having regard to the needs of all our customers.
Over the next few months our organisations will work together to make sure our service is improved, not disrupted, and that our customers see the tangible benefits of belonging to our Group, including:
1. Both BankWest and Commonwealth Bank customers will be able to
use each other’s ATMs without paying any additional fees once our systems allow;
2. Our combined businesses will strengthen our position as Australia’s leading home lender with a market share of 22.5%;
3. We will have $187 billion of funds under administration within our combined wealth management businesses;
4. The Group will have the country’s largest share of household deposits with a market share of 33.6%;
5. Through the acquisition, BankWest becomes owned by the largely Australian shareholder base of the Commonwealth Bank, bringing an established and popular brand back into local ownership.
Strength in uncertain times
These are difficult times for many global financial services organisations. However, the Commonwealth Bank is a very strong, well capitalised business with excellent liquidity. Commonwealth Bank is one of only 20 banks in the world with a Standard & Poor’s AA credit rating. Standard & Poor's, Moody's and Fitch have all confirmed the Group's credit rating with a stable outlook post the acquisition. This provides strength and reassurance in our ability to meet all of our financial commitments.
Over the weekend, the Federal Government unveiled a plan to underpin the Australian financial system starting with the uncapped guarantee of all deposits. The Government has also pledged to guarantee the borrowings of Australian banks in international credit markets, which should help to ease our funding costs.
The new Government guarantees, together with the Commonwealth Bank’s already strong position in the current economic climate, will certainly help to alleviate customer’s concerns around the safety of their deposits with the Commonwealth Bank.
Here are a couple of additional facts in regard to security of funds:
1. Financial institutions in Australia are highly regulated, and the deposits of consumers are now 100% guaranteed by the Government.
2. APRA regularly reviews and stress tests the financial position of banks.
3. No private bank in Australia has required a government bail-out since 1890, a time when the modern regulatory controls did not exist.”
