Aust bank gains NZ foothold in takeover

By RICHARD BRADDELL

WELLINGTON - St George Bank, Australia's fifth largest bank, has gained a New Zealand foothold through the takeover of New Zealand's largest factoring firm, Scottish Pacific Business Finance.

Scottish Pacific becomes part of St George by virtue of the $A42 million ($NZ50 million) takeover of its Australian parent of the same name.

In New Zealand, the company has an annual of turnover of $250 million and holds 80 per cent of the market.

Its Australian turnover is $A8 billion. More than 65 per cent of New Zealand clients draw funds and communicate with the company over the internet.

Factoring, or cashflow financing, essentially involves purchasing ledgers of receivables at an agreed discount.

Fast-growing small and medium-sized businesses typically use it to smooth out cashflows.

The New Zealand executive director of Scottish Pacific, David Cooper, said the link with St George would strengthen its development here.