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MELBOURNE - Westpac Banking Corporation's boss David Morgan, who steps down from the post next month, says it's unlikely a powerful Asian bank could seize one of Australia's big four banks.
However, he said exposure to competition from foreign banks was good for banks.
"As to the particular
threat from Chinese and Indian banks, in terms of takeover, if they're being rational about it, they'll really struggle to make sense of the sums," Morgan said yesterday.
"We are well-managed, efficient banks by global standards so I think the additional synergies that a Chinese or Indian bank could bring to a bank like us would be pretty low, frankly, and couldn't repay a takeover premium."
Morgan's comments contrast with remarks by rival ANZ Banking Group's new chief, Mike Smith, who has warned that emerging banking Goliaths from China could acquire a stake in a local lender.
"I suspect that people are running the numbers," Smith has said.
Morgan said overseas banks' attempts to pursue growth organically in Australia were good for competition in the domestic banking sector.
"Australian banks have met that challenge before and they'll meet it going forward," he said.
Under existing banking policy, a foreign bank can take over one of Australia's major banks, although it would need federal approval.
However, under the "four pillars" policy, Australia's big lenders are forbidden to merge or take each other over.
The major banks have railed against the policy, which is supported by the new Labor Government, saying they need to bulk up if they want to compete domestically and internationally.
Morgan has been an especially fierce critic of the policy.
"I think it's poor public policy. I'm disappointed with both sides of politics in not being prepared to look afresh at the issue," he said.
Australia already had a competition regulator to oversee mergersin other sectors of the econ-omy.
"If two banks want to go and have a go at this, let them go and put their case to the umpire."
Morgan acknowledged that Westpac, the smallest of Australia's big four banks, could become a target during a consolidation. But it also could sit out any merger moves and seek to boost its market share during disruption.
Morgan said Westpac and the banking industry felt they could now work with either side of politics due to the bipartisan consensus on broad economic policy.
When his banking career finishes next month, Morgan hopes to be involved in philanthropic work but he has ruled out a move to politics.
"Giving back is important. I came from nothing. My father was bankrupt when I was 10.
"This country has given me unbelievable opportunity and I want to give back to this country and to people who are starting life or going through life without the same extraordinary good fortune that I have."
- AAP
