Seller in better position than buyer

By PAULA OLIVER

It might be a good time to sell the National Bank, but that doesn't mean it's a good time to buy it.

That's the view of Massey University senior banking lecturer David Tripe, who yesterday devoted part of his quarterly newsletter to the impact of the potential sale.

Tripe said the March quarter had been another good one for banks operating in New Zealand, with all of the big retail banks achieving the benchmark 1 per cent return on assets. The National Bank had shown itself to be particularly strong in its cost to income ratio, which it had cut to 38.8 per cent.

Tripe said there were many reasons why Lloyds TSB might want to sell its prized asset, which has a strong lending presence.

But he emphasised that those factors could also turn off a would-be purchaser, who would note that the strong performance meant limited opportunities for improvements to recover the purchase cost.

Opportunities to increase the business could also be a problem.

Deutsche Bank is now weeding out the pretenders from the serious players in its process to sell the National Bank.

Australian players such as ANZ, Westpac, and the Commonwealth Bank of Australia are seen as frontrunners.

Formal expressions of interest are being sought now.

Kiwibank chairman Jim Bolger yesterday said that if the sale went ahead, it would shake- p the local banking market.

Kiwibank chief executive Sam Knowles said that a sale could improve his bank's chances of snaring customers - especially if the National Bank's buyer was one with low customer satisfaction ratings.