St George surrenders: the merger that ABS made

15 May 2008

The strategic reasons for Westpac to buy St George Bank have not changed for years. What has changed is that St George, heavily reliant on wholesale funding, has been weakened by the credit crunch, especially its reliance on securitisation.

Any employees or shareholders of St George Bank who are dismayed that Australia’s fifth biggest lender has agreed to be bought by its larger rival Westpac for less than it was worth in December should blame today’s all-purpose bugbear — subprime.

The industrial logic for the merger, good or ...

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