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The Impact of the Sale of ANZ’s SME, Commercial and Retail Business to Its Clients

Australia and New Zealand Banking Group Limited (ANZ) has just decided to focus on institutional and large corporate banking in the market. This is after they announced an agreement on 25th June 2018 to sell their SME, retail and commercial businesses in Papua New Guinea (PNG) to Kina Bank. Kina Bank is under the whole ownership of Kina Securities Limited a PNG based company that is listed on the Port Moresby and Australian stock exchange. The agreement is just waiting for final regulatory approval from the Bank of Papua New Guinea for it to be finalized by the two parties.

The sell comprises of ongoing roles for all relevant PNG staffs and all 15 ANZ branches. ANZ will go on with managing the SME, commercial and retail businesses to ensure a smooth transfer of ownership. This will go on until the completion of the transaction in late 2019 when Kina has the full control of the businesses. ANZ said that the institutional and large corporate banking in PNG remain unaffected and they see growth opportunities and have a positive economic outlook.

The move to sell the business comes after a strategic review of ANZ’s wealth and retail operation in Asia. They gauged at options to simplify the bank, efficiently distribute capital across the group and significant on capital flow and trade across the Asia-Pacific region. The decision to transact with Kina is in line with the company’s strategy. It, therefore, has no impact on the group’s large cooperate or institutional banking business in PNG or interfere with its commitment in the market. The transaction comes after the announcement made recently of the sales of the group’s wealth and retail businesses in Cambodia, Vietnam, Indonesia, Taiwan, China, Hong Kong, and Singapore.

Kina launched back in October 1985 making it the fourth largest bank in PNG with over 11,000 customers, six branches and expanding its electronic network. The transaction between Kina bank and ANZ group does not have an immediate impact on ANZ group banking. This is because ANZ will continue to manage the business until the transaction is complete. The whole transaction will take 18 months for it to be complete and ANZ promises to keep its clients updated.

There will be no need for ANZ customers to move their bank accounts since there will be no any changes during the transaction period. Furthermore, the terms and conditions of banking remain the same. Apart from that repayments, interest rates, charges and benefits are still applicable during any transaction. There will be no changes to any of ANZ’s product and service offering, and any new application will be carried out using the existing terms and conditions.

The ANZ clients will continue to use ANZ branches, ATMs, products and services. Clients should note that they will not be able to access Kina services or products past any pre-existing arrangement until the whole transaction is done that is until late 2019. But ANZ encourages its customers to transfer to Kina as part of the deal to access world-class banking services. But those who do not wish to be transferred will have their accounts closed down according to existing terms and conditions and relevant laws. Their deposits will then be transferred to banks or accounts of their choice. The process does not have an impact on the institutional or large corporate businesses in PNG.

On the existing ANZ credit cards and loans, there will be no charges to a current banking relationship with ANZ. Kina will repossess and re-brand the ANZ EFTPOS fleet. However, ANZ promises to keep ANZ EFTPOS Merchants updated in case of any changes and notify them of any action they need to take. Once the transaction is done, ANZ will run a non-retail branch in Goroka, Lae and Port Moresby to support institutional and large corporate clients. Those located out of the three areas there are arrangements with Kina Bank to support their business banking needs on behalf of ANZ.

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Written by Denis Opudo

Am an engineer who's a tech blogger, hit me up on dennis@techinpacific.com and we base our discussion on technology in Pacific countries and the rest of the world.
Denis the Tech guru

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