Old associates may work together again under one banner should Westpac Bank and St George Bank meld into Australia’s largest financial services institution and its third biggest dealer group.
St George agreed on May 13 to an $18.6 billion all-stock merger proposal from Westpac to create Australia’s largest bank by value.
The combined bank would have a pro forma value of $66 billion, rivalling that of British giant Barclays and exceeding the $60.8 billion worth of Commonwealth Bank of Australia (CBA).
Westpac-owned BT Financial Group chief executive Rob Coombe hired St George-backed Asgard Wealth Solutions chief executive Geoff Lloyd in the mid-1990s.
Lloyd was formerly BT head of customer solutions and reported directly to Coombe.
Other former BT employees who also switched to Asgard include BT head of wrap Dean Thomas, Carl Molden and Lisa Chadwick, who worked on BT products, and Carolyn Colley, who worked on BT Wrap. They may again work together in the new entity.
Discussions about the firms’ brands, platforms, financial planners and software had barely begun, but together the banks could operate the “Woolworths” of all dealer groups, Morningstar analyst Peter Warnes said.
Combining BT with Securitor and Asgard would create a dealer group with a bigger menu of products, stronger distribution channels and cost savings, Warnes said.
Collectively, Westpac and St George have 1124 planners with 648 practices, according to data from the latest IFA Dealer Group Survey.
That puts the entity below Professional Investment Services, Australia’s biggest dealer with 1540 advisers, and AMP Financial Planning with 1295 planners.
However, the deal must satisfy regulatory bodies ASIC and the Australian Prudential Regulation Authority and also Federal Treasurer Wayne Swan.
An ASIC spokesperson said the watchdog would review the merger once more details were available, but did not wish to make a comment on the scale of Westpac and St George’s combined financial planning businesses.
Westpac will offer St George shareholders a premium of 28.5 per cent of St George’s closing price on May 9, valuing the company at $33.10 a share, Westpac said in a statement to the Australian Securities Exchange.
