Bank South Pacific To Take Over Wespac Tonga In May

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PNG based BSP working to complete legal transition

NUKU‘ALOFA, Tonga (Matangi Tonga, March 19, 2015) – A Papua New Guinea based bank, BSP, is expected to take over the operations of Westpac Bank of Tonga in May when the legal transition is completed.

Johnson Kalo, Deputy CEO of BSP from Port Moresby, told the Tonga Chamber of Commerce and Industries Inc. on March 18, that BSP has agreed to pay $125 million (AUD) [US$95.5 million] to Westpac for its banks in five Pacific countries.

Westpac in January announced that it was selling its smallest Pacific banking operations in Samoa, Cook Islands, Solomon Islands, Vanuatu and Tonga to the Bank South Pacific Ltd. (BSP), while retaining Westpac operations in its largest Pacific islands markets of PNG and Fiji.

"We are planning a smooth transition of services," Johnson told a breakfast of Tongan business people at the Waterfront Lodge & Restaurant.

He said that BSP was a profitable bank and was funding the acquisitions internally.

"BSP is a substantial bank with the equivalent of $12 billion (TOP) [US$5.8 billion] in assets and we look at ourselves as a regional bank," he said.

"We foresee a large increase in trade in the Pacific and we are building better bridges across the Pacific to help that happen in the future."

"BSP is a public listed company on Port Moresby stock exchange and pays dividends of 6-8%," Johnson said. The bank’s shareholders include the IFC (10%) two large landowner corporations who have leased their lands to mining ventures, the Catholic and Lutheran churches, and many individuals.

The transition from Westpac to BSP in the five new countries is subject to the parties obtaining necessary statutory, regulatory and third party approvals. Johnson said that they are working through that now and Ralph Stephenson is the legal adviser for BSP in Tonga.

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