Bank of Scotland not a danger

Press, 16 September 1987, Page 38

Bank of Scotland not a danger

PA Auckland The Bank of Scotland will not be able to take over the Countrywide Building Society even though the bank is to take 40 per cent of the society’s planned share Issue, according to chairman, Mr Peter Clapshaw. The Bank of Scotland has agreed to take 40 per cent, and the General Accident Insurance Co. NZ, Ltd, 20 per cent, of the share issue by which Countrywide will convert from a building society to a publicly listed bank later this year. The agreement prevents the proposed major shareholders from increasing their holdings for five years, and restricts the sale of their shares to parties approved by Coun-

trywide, Mr Clapshaw said.

The two major shareholders will not have board control either. The Bank of Scotland will appoint two directors, and General Accident one, but the new board will consist of nine directors, five of whom will be existing Countrywide directors, plus the chief executive, Mr Martin. “The Bank of Scotland is twice the size of the Bank of New Zealand and its equity participation and experience in retail banking clearly are vital to the credibility of the float,” Mr Clapshaw said. The Bank of Scotland, established in 1695, is a major U.K. clearing bank with 542 branches in Scotland and 12,000 staff

around the world. It has assets of £9.3 billion (SNZ2S billion), and its 1987 tax paid profit was £72 million (SNZI9S million). “It is renowned for its innovative approach to consumer banking and computer technology,” Mr Clapshaw said. The provision of residential mortgage finance and personal savings accounts will continue to be the main activity of Countrywide. “But new products such as a Visa card, cheque accounts, overdraft facilities, travellers cheques, and life insurance will be introduced by the new bank and the Bank of Scotland’s experience will be invaluable in assisting us,” Mr Clapshaw said.