Today I am announcing approval, with conditions, of the proposed acquisition of the Bank of Western Australia (BankWest) and St. Andrew's by the Commonwealth Bank of Australia, in accordance with the Financial Sector (Shareholdings) Act 1998.
I have taken this decision after a comprehensive assessment of its impact on the national interest, with conditions that support a strong and competitive Australian banking system.
These conditions will also ensure the best possible outcomes for both customers and employees of CBA and BankWest. In particular, CBA is required to maintain and grow the BankWest brand as well as provide support for staff affected by the acquisition.
CBA is required to maintain BankWest's head office and core functions in Western Australia, and CBA and BankWest branches and business centres in Western Australia are not permitted to close as a consequence of the acquisition.
Importantly, CBA is also required to remove fees for CBA customers using BankWest ATMs, and vice versa, from 3 March 2009.
In addition to maintaining a strong and competitive banking system, and protecting the interests of customers and employees, this decision takes into account a range of other important considerations including prudential requirements, economic efficiency and community banking needs.
The decision also takes account of the detailed assessments of the Australian Competition and Consumer Commission, the Australian Prudential Regulation Authority and the Treasury.
The proposed acquisition of BankWest by CBA removes uncertainty over the future of BankWest and has helped instil more confidence in the Australian financial system.
The merged entity will have a larger balance sheet and stronger capital position, as well as broader access to funding markets leaving it better placed to withstand further challenges from the global financial crisis.
The BankWest brand will also benefit from CBA's lower funding costs, helping it to offer lower interest rates on loans.
18 December 2008
The conditions to which this approval is subject are that:
For a period of at least three years after the date of acquisition:
In addition, for the period of integration under the acquisition process:
The Commonwealth Bank of Australia (CBA) will not be liable for any failure to perform any obligation imposed by these conditions if the failure is due to Force Majeure.
If CBA is by reason of Force Majeure unable to perform an obligation under these conditions, CBA will, as soon as practicable and in any event within 30 days, notify the Treasurer, specifying:
and will use all reasonable diligence and employ all reasonable means to remedy or abate the Force Majeure as expeditiously as possible.
Force Majeure means:
CBA will give written notice to the Treasurer of the following matters as soon as practicable and in any event within 30 days after the relevant occurrence: