BSP encourages competition
By CLARISSA MOI
THE Bank South Pacific welcomes and encourages competition in the country’s banking industry as it will provide more choices for customers, says chief executive officer Robin Fleming.
He told The National regarding Westpac’s recent announcement to sell its PNG and Fiji businesses to Kina Bank that the sale was subjected to the approval of the Reserve Bank of Fiji, Bank of PNG, the Independent Consumer and Competition Commission and the Fiji Competition and Consumer Commission.
“BSP welcomes and encourages competition, and in Fiji where there are six banks for a country with a population of just under one million people, that competition and choice for customers will be preserved,” Fleming said.
“In Papua New Guinea though, with a population of almost 10 million people, a move to have only two retail banks may not necessarily be in the interest of consumers.”
Towns such as Aitape, Arawa, Bialla, Buka, Bulolo, Daru, Kainantu, Kiunga, Kundiawa, Lihir, Mendi, Moro, Porgera, Tari and Wabag have only BSP branches.
It means that in almost 60 towns and business centres in PNG, the only bank that has a branch or sub-branch is BSP.
“Papua New Guineans want more choice in banking services, not less, and having only two banks in Papua New Guinea will not provide more choice,” he said.
“Consumers want to have a vibrant banking sector that will be competing for customers in all segments – corporate, retail, full time employed, part-time employed, those in self-employment and those in rural areas – and that choice can only be offered if there are more banks in Papua New Guinea, not fewer.”
Westpac is selling its Pacific business operations to focus on its business and institutional banking in Australia and New Zealand.
The ICCC has been approached by Kina Bank and Westpac for consultation on the proposed deal.
Westpac PNG and Fiji will cost Kina Bank up to AU$420 million (K1.1bil).
It made an initial 10 per cent deposit of AU$42mil (K110mil) with the remainder to be paid once the acquisition was completed which was expected to be done in September.
11 comments
PNG needs more than 2 banks so that the 10 million people can have a choice in banking services. If Westpac eventually sells it’s Pacific operations to Kina Bank, then can BPNG gives licenses to ENBSL or Kada Poroman Bank in ENBP so that they can operate as commercial banks? Just a thought.
ICCC must reject this sale of Westpac facilities in PNG to Kina Bank because that will only reduce the number of commercial banks to two when PNG is the biggest country with a big population in the Pacific. We need competition that will give people the freedom to choose!
Iso you are correct…that’s that’s the stand BPNG and ICCC should take for interest of banking service in our country.
Fully agreed.
Customers need to make choices in which bank they wish to bank with depending on the products offered.
Competition helps to improve services and products offered.
It is a sad news to hear. I mean with growing number of population every five years that will depend only on one or two financial institutions is super demanding, and increasing pressure for banking industry especially for only two leading commercial banks, BSP and Kina Bank. BSP is the premier leading banking institution in the country and has majority of the business houses and institutions connect with it. That is why about 75% of the populations are banking with BSP.
It is true that PNG needs competition especially with banking system. Therefore, I suggest if Westpec consider not selling its Pacific business just yet but enquire with the national government’s support and/or build its capacities, upgrade and extend its services.
PNG cannot afford to have monopoly or monopolistic/ duopoly Market. Consumers will be worse off with this kind of market structure.
The ICCC must not compromise. It has the right to refuse or otherwise say no to technically creating monopolistic Market.
Mr., Fleming is definitely 250% correct. We Papua New Guineans are daily being robbed under the very bright sun light by Bank South Pacific (BSP). Every time for how long a customer spends with the BSP teller, a time is recorded and being charged to the customer and imposing and charging aaaaaall kinds of fees and taking our hard work money for less service. PLEASE WESPAC, ANZ AND OTHER BANKS, WHY LEAVING A GAP FOR BSP TO CONTINUE ROB IN MORE BIG WAYS. Help save customers by providing completions amongst BSP and take us all customer for all provinces of PNG.
WE ARE FED UP WITH BSP. CAN THE GOVERNMENT LOOK INTO THIS ISSUE.
WestPNG should be taken over by the NDB rather than being sold to Kina Bank to maintain competition in the banking industry.
At least we can see some light at the end of the tunnel in terms of banking services for the growing business sectors in PNG. I wish the current acquisition of westpac bank by Kina Bank, some day branch out to rural settings like Bialla as we are bogged down with one commercial bank only (BSP). Classic experience this festive seasons where customers were left dry without cash at the only ATM.
I think the bankers have a choice to sell out their business if they wish to. ANZ has already sold out its commercial, retail and SME banking businesses (in PNG only) to Kina Bank. Westpac is also trying to sell out.
These overseas banks have been in the country for some time and are probably not so competitive as they are back in their own countries. Kina Bank is PNG owned, so it’s good to compete against BSP. Finally, there’s a real competition going. However, PNG needs more banks for good competitive rates that are fair for customers.
Clients who banked with West Pac still embrace the services it provides and the news was really unwelcoming.
Why are we seem to be loosing our major banks ANZ & West Pac to a recently established bank growing so very fast with major acquisitions onboard?
Can ICCC have a say on this?
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