National Bank to move incorporation

Press, 16 January 1985, Page 27

National Bank to move incorporation

The National Bank of New Zealand, Ltd, is to become a New Zealand public company, but says it will not sell shares to the public or seek stock exchange listing in New Zealand. The bank said in a statement that it would place legislation before both the New Zealand and British Parliaments to become a New Zealand incorporated company but would remain a 100 per cent owned subsidiary of the big English bank, Lloyds PLC. The minimum seven shareholders needed for a public company would all be representatives of Lloyds, the bank’s chief executive, Mr J. B. Macaulay, said. The change has been explained as a move to bring the National more in line with the bulk of its business, but it will also strengthen the bank’s bid to attain a licence to operate in Australia. Mr Macaulay said that with the bank’s business now largely conducted in New Zealand, it was considered more appropriate that it be incorporated only under the laws of New Zealand.

A private bill to achieve the change to be introduced into the New Zealand Parliament would not change the National’s legal

standing in any way. “The move to incorporation as a public rather than a private company is based on the belief that the more extensive reporting procedure required of public companies was better suited to the bank,” he said. The bank was established in London, in 1872 and had a substantial shareholding in New Zealand. It was incorporated under its own acts in Britain and New Zealand. For 105 years it was controlled by a board and head office in London and in 1966 became a wholly owned subsidiary of Lloyds. The National has long been seen to have operated under substantial delegation to a general manager’s office in New Zeaand, and in 1978 the board and head office were transferred here from London.

The chairman is Mr D. H. Tudhope, whose other directorships include Shell New Zealand Holding Company, Ltd, EMCO Group, Ltd, and Commercial Union General Insurance Company, Ltd. Its 1983 annual report shows the National to have assets in excess of $3 billion, including investments of $4BO million. Its share capital, $16.1 million, is held by Lloyds PLC and it has reserves of more than $l7O million. The bank also has

large retail finance interests through a 51 per cent stake in General Finance, Ltd. It is the smallest of the four trading banks in New Zealand, with 189 agencies, deposits of $1462.9M as at December 1984 and advances and term loans of $1085.1M. The legislation to effect public incorporation in New Zealand will involve repeal of the National Bank of New Zealand (Ltd) Act 1873, and a similar bill will be introduced in the British Parliament to end incorporation in England. The bank’s statement yesterday quashed speculation that the National would make a move similar to that of the Australia and New Zealand Banking Group, Ltd, which sold its New Zealand operations to a new company, ANZ Banking Group (New Zealand), Ltd, which then floated part of its capital to the New Zealand public in 1980 and gained stock exchange listing. One of the arguments against the National getting a bank licence in Australia has been that it would amount to a back-door entry by Lloyds. The end of incorporation for the National in Britain might reinforce the bank’s claim to be independent of its larger parent.