Kina Securities Limited recently presented a vigorous banking strategy to PNG’s competition commission recently in support of its acquisition of Westpac PNG.
Kina Securities Ltd Chairman, Isikeli Taureka and Managing Director and CEO, Greg Pawson, outlined a powerful vision for more competition in the banking sector, more innovation and customer choice for PNG, if the Independent Consumer and Competition Commission (ICCC) approves the acquisition.
“Our mission is to constantly improve the prosperity of the people, communities and markets that we serve. We strongly believe that this transaction should be approved by the ICCC,” said Mr Taureka.
Mr Pawson committed to a K25 million investment in technology and digital innovation, expanding the Westpac PNG branch and instore network by 50 per cent in the first three years after the acquisition, and to creating a pan-Pacific bank domiciled in PNG.
“We will expand the distribution footprint of banking services across PNG to reach more Papua New Guineans,” said Mr Pawson.
“We will retain the existing Westpac corporate structure, banking license, operations and technology and simply rebrand as East West Commercial Bank.
He said this exciting new bank brand will also be used for Westpac Fiji and positioned as PNG’s international bank brand.”
The multi-brand strategy, common in many countries, will see East West Commercial Bank compete directly with Kina Bank, and will provide customers with a full range of competitive, innovative financial services.
“Expanding the distribution footprint will ensure more competition in locations across PNG which are currently only served by one bank or not at all. It’s a huge commitment to reinvigorate financial inclusion,” said Mr Pawson.
Kina also sees a medium-term prospect of securing banking licenses in Australia and Singapore to improve PNG’s access and reach across the region.
These commitments were part of seven major and significant public benefits, Mr Pawson outlined to increase competition, improve access and provide more jobs for Papua New Guineans.
“Kina will prevent job losses and retain all existing Kina Bank and Westpac employees. We will create 50 new PNG based jobs within the first 12 months following the acquisition.
“All of Westpac PNG’s existing senior management and executive positions will be nationalized and given to PNG local talent, including the country head position.”
Mr Pawson continued to explain that Kina’s proposition was a game-changer for PNG as they aim to help smaller banks, savings and loan societies, and non-bank financial institutions compete.
“We will give them access to our infrastructure. We will facilitate fee free access to our ATM and POS networks; extend our USSD services to give them a white label mobile presence in the market; and allow them to operate from our branch network where they are unrepresented,” he said.
Mr Taureka also addressed the contention by the ICCC that the acquisition would lead to tacit collusion and reduce competition.
“While the concepts of a duopoly and tacit collusion will be addressed in detail in our final economic and legal submissions, the significant disparity in market positions between Bank South Pacific and Kina indicate that such a result is impossible,” he said.
Mr Taureka confirmed Kina’s commitment to improving banking services in PNG for the benefit of all Papua New Guineans.
“This transaction is in the best interests of the people of PNG, and the banking and financial services industry more broadly.