Director rethinks issue

Press, 8 March 1989, Page 6

Director rethinks issue

By

PATTRICK SMELLIE

The rebel Bank of New Zealand director, Mr Rob Campbell, last evening conceded that an Australian owner for the bank was probably preferable to a foreign owner from further afield. Mr Campbell had earlier in the day renewed his opposition to the sale of the BNZ offshore. In an interview with “The Press” he said part of his opposition to such a sale stemmed from fear that the lack of a substantial New Zealand-owned bank would disadvantage New Zealand businesses. This particularly applied to exporters, who had been keenly supported by the BNZ. "I’m not saying that the ANZ or Westpac don’t do those things at all.

But my causal observation is that the likelihood is that they won’t.” But while he had not thought carefully about the distinction, Mr Campbell said he was prepared to accept that a “truly Australasian” ownership for the BNZ might be preferable to sale to, say, British, American, or Japanese buyers. Other important issues raised by foreign ownership of the BNZ were its effect on the local sharemarket, and the possibility that a foreign owner would hamper the BNZ’s growth. “Having a major domestically owned bank gives depth to the local sharemarket,” he said. “A market with no representation from the local financial sector, which is the way we’re heading, has a fairly

shallow base.” Moreover, tougher international banking rules regarding banks’ ratios of capital to lending meant a foreign owner could tend to skimp on the BNZ’s on-going capital requirements. Mr Campbell suggested the Government had a range of alternative options available to it, if it was prepared to “take its time over it.” These included a public share float, a consortium bid of New Zealand buyers, partial sale of the bank, or simply retaining ownership. Mr Campbell would not reveal whether he believed the Government should sell the BNZ at all, saying such discussion was fruitless given the Government’s policy to do so.