Commonwealth Bank of Australia (CBA) has agreed to buy BankWest from its parent, Halifax Bank of Scotland (HBOS), for $2.1 billion.
The move will allow CBA to boost its banking and financial planning exposure in Western Australia.
It will also allow CBA to increase its mortgage exposure and fend off the threat posed by the expected merger of Westpac and St George Bank.
"BankWest provides a significant opportunity to further develop the group's business in the fast-growing Western Australian market," CBA chief executive Ralph Norris said in a statement to the Australian Securities Exchange (ASX) today.
CBA has 77 branches in WA, compared to 364 in New South Wales. BankWest had around 87 branches in WA, an HBOS Australia spokesperson said.
The deal also includes HBOS' specialist insurance and financial planning arm, St Andrew's Australia, and advisory business Whittaker Macnaught.
St Andrew's Australia had 18 advisers and $369 million in funds under advice (FUA), while Whittaker Macnaught had 24 planners with $1.6 billion in FUA at the end of June, data from the latest IFA Dealer Group Survey showed.
Commonwealth Financial Planning in contrast had 730 advisers with $24.3 billion in FUA at the end of June, the survey showed.
Media reports have suggested the deal was hastened after HBOS shares dived 41 per cent in FTSE 100 trading overnight. Lloyds TSB agreed to acquire HBOS last month for $27 billion.
CBA today also requested a trading halt for two days in order to undertake a $2 billion institutional placement, a separate CBA statement to the ASX said.
