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Will Westpac/St George kill competition?

A senator from South Australia is calling on the Federal Government to block Westpac’s proposed takeover of St George.

The acquisition has got Nick Xenophon angry: “If [Treasurer] Wayne Swan wants to have competition in the sector, don’t allow that merger, because it will reduce competition.” (The Australian)

Is Xenophon right to be anxious? Will the deal really kill competition? And what will be the affect on jobs, if and when the takeover goes ahead?

At the moment it looks unlikely that the bid will be blocked – the Australian Competition and Consumer Commission has already stated that it won’t stand in Westpac’s way.

So is the senator just engaging in pointless grandstanding, or do you also fear for the future of competition in the financial sector?

Comments (6)

  1. Australia needs as many large financial firms as it can get, if it wants to be taken seriously as a banking centre.

  2. Competition will not be killed – there are still plenty of banks out there who will be able to compete with the new firm.

  3. A merger between one of the big 4, if that’s ever allowed to happen, would have serious implications….St george is too small a fish to really upset the balance here.

  4. To kk,

    St George is not a small fish, it’s actually the 5th largest bank in Australia. So if Westpac merges with St George it will become THE largest in Australia

  5. The deal is almost done – like it or lump it….

    “Independent expert Grant Samuel has said that Westpac’s takeover offer for St George Bank is fair and reasonable…It is also in the best interests of St George shareholders, the expert’s report said….The St George board confirmed its unanimous recommendation of the Westpac offer in the absence of a superior proposal.”

  6. Roger, sorry mate, the 5th largest bank in a medium/small market like Australia is a small fish….maybe not a baby, but a toddler in the world financial markets. Who outside Aus has heard of St George? St who??

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