Qualified Approval Of Bank Merger

Press, Volume CIX, Issue 31936, 13 March 1969, Page 16

Qualified Approval Of Bank Merger

(N.Z. Press Association) SYDNEY, March 8. The Australian Government’s approval of the merger of Australia’s two Eng-lish-controlled banks won mixed receptions today from financial commentators.

The Federal Treasurer (Mr W. McMahon) announced last night approval for the merger of Australian and New Zealand Bank, Ltd, and English, Scottish and Australian Bank, Ltd.

But he made it clear there were conditions to the approval which would enable the Government to be satisfied that the merger was expected in a manner which was “in the Australian interest.”

The Sydney “Daily Telegraph” said today that the Government’s qualified approval raised more problems than it solved, as the Treasurer had not been explicit in his statement about the corporate structure.

There were two possible holders of authority the combined holding company. Australia and New Zealand Banking Group, Ltd, or the planned operating company, A.N.Z. and E.S.A. Bank, Ltd. “The Government does not make it clear which of the two would be approved as the new licensee,” the Telegraph said, and commented that the Government would clearly like the merged bank to follow the suggestion that it should offer shares in the Australian holding company to Australian resident shareholders—“sort of buying back a bit of the farm.” The “Australian” said the Government had no option but to approve the merger. The economic case was overwhelming.

Having one less bank to control should make Reserve Bank control over monetary policy easier in future, it said.

The main immediate gain from the mergers, however, would be the curbing of competition at the branch banking end of the business.

This would free scarce capital and labour resources for much more productive alter-; native uses in the economy.