What sort of bank will Westpac and St George be?
It will have 10 million customers, which is roughly half of Australia’s population. Crucially, it will have Westpac’s AA rating, rather than St George’s A. At the time of the merger announcement, it was envisaged as having a combined market capitalization of A$66 billion ($477 billion), although an improvement in the St George share price since then had increased that figure at the time of writing.
The combined bank will be Australia’s leading home lender, with a 25% market share; the leading overall lender, and the leading credit card provider. It will also be the largest wealth platform provider, with A$108 billion of funds under administration. It will have 1,200 branches and 2,700 ATMs, A$408 billion in loans and $299 billion of deposits, based on March 31 figures. According to data from the Australian Prudential Regulatory Authority, also from March, the combined bank will not be a leader in every field, though: in corporate lending it will still lag National Australia Bank and ANZ, and it will trail Commonwealth Bank of Australia in household deposits.
Westpac had a pro-forma tier 1 ratio of 7.7% in the first half of 2008, with a recent investor presentation suggesting the post-merger capital position should be "at a similar level".
The group will have a range of brands. Apart from the Westpac and St George banking names, there will also be a South Australian group, BankSA, that was part of St George; and RAMS, a home lending brand purchased by Westpac in January this year.