Today’s piece in the Herald Sun was interesting. HBOS have put a lot of time and effort into their international expansion over the last decade, so I would have to be skeptical that they would be looking to sell. That said, if they were looking to raise a fair amount of fresh capital, selling all, or only part, of BWA would make some sense.

If we assume that St. George will be sold to one of the big 4 (whether Westpac or not is irrelevant) then BankWest would be the fifth biggest bank in the country – and the only way for one of the others of the big four to increase scale without actually having to do the hard work of increasing business gradually – through processes like increasing customer satisfaction, building the brand etc.

It would also be the only way (except perhaps through a purchase of the ANZ) that a large international bank could gain scale quickly.

If HBOS were looking to sell they could expect a very full price as a result.

The only problem, of course, would be the Bank of Western Australia Act, 1995, and in particular section 23, which mandates that the bank has to be headquartered in WA and, effectively, run from Perth. For one of the big 4 banks this would mean that they would have to accept a subsidiary headquartered in Perth that they cannot fully integrate. This can be got around in some ways (for example the powers of the Managing Director are not specified – a bank teller could carry the title) but it would be tricky and could expose them to legal issues.

This means that the WA government has at least a partial veto over such a change of ownership – and one they can be expected to wield if required. This would reduce the benefits of an Australian bank buying it – and therefore reduce the chances of this occurring. I would be interested, though, to see if (WA Premier) Alan Carpenter has any meetings with senior members of the management of any of the big four over the next few weeks.

My favourite option, then, would be (if it were on sale) a foreign one buying it – but it would have to be well cashed up as BWA has always been a bit weaker in the deposit side, although that has been partially addressed recently with the help of HBOS.

Personally, I think the ANZ is the most likely to be bought – but the new federal treasurer may hav

hier klicken e other ideas.