Westpac boss wants Aussie banks to merge

Four PillarsWestpac CEO, David Morgan, has told The Australian newspaper that the four pillars policy, which prevents any of the four major Australian banks merging or taking each other over, is archaic.

He believes the policy will be removed within the next 5 to 10 years, allowing some of the four major banks to consolidate into single, larger global bank.

John Stewart, the CEO of National Australia Bank (which owns the BNZ), also said last year that, with globalisation, he could not see Four Pillars lasting for another decade.

Australian bank bosses have long argued that creating larger banks through a process of mergers and takeovers would allow them to make more money through:

“economies of scale, reducing costs through investment in technology and better systems, or joining the growing trend to outsource back-office tasks, either locally or offshore. A bigger balance sheet would also open the doors to bigger deals.” [our emphasis]

Currently a similar round of mergers is taking place in Europe, led most notably by competition between Barclays Bank and Royal Bank of Scotland to buy Dutch bank ABN AMRO.

(thanks to wallyg for the photo)

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