11.45am
ANZ Bank is buying the National Bank of New Zealand for A$4.915 billion ($5.71 billion).
The purchase of National, owned by Britain's Lloyds TSB Bank, will make ANZ New Zealand's largest bank.
The purchase price excludes a $575 million dividend to be paid to Lloyds.
The Reserve Bank said it had conditionally consented
to the purchase.
All the top brass of both banks are gathered in Wellington for a news conference later today.
ANZ said it was inviting National Bank chief executive Sir John Anderson to head the merged entity.
It said it was aiming at savings of A$110 million per year within three years as a result of merging the two banks.
ANZ simultaneously announced it had made a September year net profit of A$2.3 billion.
It said it would raise A$3.6 billion in a rights issue to fund the purchase.
ANZ received Commerce Commission approval to buy National last month.
It became the last man standing in the protracting bidding process for National -- with other contenders such as Westpac and Commonwealth Bank of Australia withdrawing from the race along the way.
There has been strong speculation ANZ would dump its own poorly perceived brand in New Zealand and retain the well respected National brand.
When it bought the Postbank in the late 1980s it retained the brand for a few years before quietly dumping it. Westpac has reverted to its brand after temporarily branding itself WestpacTrust in the wake of its TrustBank purchase.
Lloyds TSB, Britain's fifth biggest bank, is shedding overseas businesses as it tries to revive its United Kingdom retail banking operations.
The bank agreed to sell almost all its Brazilian assets to British rival HSBC Holdings on October 9 for US$815 million ($1.36 billion) and sold its French wealth management business to UBS AG in May. HSBC was also speculated as a possible purchaser of National but later said it was not pursuing it.
ANZ, Australia's third largest bank, will use proceeds of a recent cash raising and funds from the US$1.3 billion sale of Grindlays in 2000 to finance the purchase of National. It may not need to raise further cash to fund the deal, which must be approved by the Reserve Bank.
National first-half pre-tax profit rose 34 per cent to $416 million, or 8.8 per cent of Lloyds TSB's pre-tax profit, on strong growth in mortgages and business banking, Lloyds TSB said in August.
- NZPA
