Australian parent will hold on to Westpac NZ

Westpac Group will keep its New Zealand banking business. Photo / File

Australian bank Westpac Group will keep its New Zealand banking business Westpac New Zealand.

Westpac Group chief executive Peter King said after a detailed review it believed a demerger of the New Zealand banking business would not be in the best interests of its shareholders.

"Our review identified opportunities to improve service for customers and value across the WNZL business and we will progress these with the WNZL board and management team."

"WNZL is a strong business that has been serving New Zealand for 160 years. We remain committed to delivering for customers and fulfilling our purpose of helping Australians and New Zealanders succeed."

King said Westpac Group and the New Zealand board would now prioritise the appointment of a new New Zealand chief executive.

Current CEO David McLean is set to retire tomorrow. Simon Power will be acting CEO from then.

Power said there would be no change for customers and the bank would continue to focus on its service and supporting the New Zealand economy through the pandemic recovery.

"Westpac New Zealand continues to have strong support for what it is delivering for customers and its role in the Westpac Group."

It has staff of 4000 in New Zealand and around 1.3 million customers.