BSP still keen on Westpac Vanuatu and Solomons

Transcript

The Bank South Pacific says it is still keen on purchasing Westpac subsidiaries in Solomon Islands and Vanuatu.

This after the two countries were left out of a massive US$67 million purchase of Westpac businesses in Samoa, Tonga and the Cook Islands.

The deputy chief executive of BSP, Johnson Kalo, says the bank is hoping it can extend its expansion plans to the two countries but admits that Vanuatu in particular could take longer than expected.

JOHNSON KALO: One of the concerns was that we had the commercial community and the Government to try and restore or repair that market and the economy in the wake of cyclone Pam and one of the concerns [was] that the entry of BSP at this time would not be appropriate so we are working together with Westpac and the regulator in Vanuatu to bring the matter to a favourable conclusion in the future.

KOROI HAWKINS: For the branches and subsidiaries already acquired, what is the transition phase involving?

JK: Immediately there is a brand change, so everything is visibly in the BSP brand at this stage, branches, staff are in uniform, documentation, products and so on. Over the medium term or over the next several months, we'll work together with Westpac to transition the more complex operational features around technology and communications, we expect to complete that over the next few months under a special transition agreement.

KH: And is there a timeline for return on investment for these new purchases or is it more about strategy?

JK: It's a little bit of both, I think the businesses will return a tidy profit and a tidy return on equity over the medium to long term we will certainly have the businesses repay that investment but in a strategic sense also, it's about promoting the economy, the cooperation between the markets in terms of trade and other flows and BSP being a resident in one of the larger Pacific economies, in PNG, feels there is some great strategic merit in getting in the Pacific in those countries.

KH: Any plans to go further afield?

JK: Look as opportunities arise, they will be considered on their own merits and where it's viable, yes we'll seriously look at it at this stage and we look forward to operating in the new countries, working together with the new businesses and the staff and the community, the customers, looking to develop those economies and those countries and looking forward to the prosperity that we all hope to achieve.