‘Rejection calls for competition’


THE Independent Consumer and Competition Commission’s (ICCC) decision to reject Kina Securities Limited’s (KSL) application to acquire shares in Westpac PNG signals the need for competition, Micro Small Medium Enterprise (MSME) Council president Des Yaninen says.
The ICCC on Tuesday announced that it had rejected KSL’s application, saying the acquisition would reduce the number of banks among other reasons.
“Competition is good for customers,” Yaninen told The National.
“Both BSP (Bank South Pacific Financial Group Ltd) and Kina Bank provide excellent SME (small medium enterprise) products for our people.
“The sooner the Westpac sale is settled the better for the people of PNG and our SMEs.
“We hope that whoever eventually gets the green light to buy Westpac will also offer excellent SME products and superior service to SMEs nationwide.”
Yaninen said the ICCC received views from the general public and government departments before making its decision.
“The signal it sends to prospective investors in the banking space is that ICCC wants more competition and thereby superior banking services provided to our people nationwide, not just in cities and towns.
“Banking needs to go down to the districts.”
ICCC in its determination further stated that markets were currently highly concentrated and would remain so long as there were few players in the market.
“The number of banks will be reduced to two with the acquisition,” chief executive officer Paulus Ain said.
“The barriers to entry and expansion are very high and the proposed acquisition would further heighten the barriers to entry as numbers of banks are reduced giving more market power to the two existing incumbents.”