Westpac in ‘aggressive pursuit’ for Lloyds’ Australian operations

Westpac in 'aggressive pursuit' for Lloyds' Australian operations

A successful acquisition would offer growth opportunities in an otherwise limited environment.

Ryan Newman (TMFNewmy)

Ryan Newman (CFA) is the Director of Research of The Motley Fool Australia, and Portfolio Manager for the Pro and North Star services. Ryan’s interest in investing and stocks began at a young. His journey with The Motley Fool started first as a member but when the company first came to Australia he joined the team as one of our writers. Recognising his investing talent and passion, it wasn’t long before he was approached to join the investing team as a research analyst on Pro. Ryan is passionate about learning and continual development. He earned his Chartered Financial Analyst (CFA) designation in 2022, and has completed his Bachelor of Accounting and his Graduate Certificate of Corporate Finance. Ryan loves spending time with his young family as well as non-fiction reading, catching the latest movies and following his sports team, the St Kilda Saints (AFL).

Published August 13, 2013 10:34 am AEST

In an effort to cut costs and strengthen its balance sheet, Britain's Lloyds Banking Group is reportedly aiming to reduce its international branches from 14 countries to less than 10 by 2014 with the sale of its core operations as well as a separate auction for its Murray portfolio – which consists of 'a dozen soured loans'.

The Australian Financial Review stated that Westpac (ASX: WBC), along with rival National Australia Bank (ASX: NAB), are thought to be the keenest of the big four whilst Macquarie Group (ASX: MQG) is also quite interested in the acquisition, which is said to be worth around $8 billion. The acquisition would increase the potential for growth in the corporate lending market, which is 'persistently anaemic'.

Whilst it is the big four as well as Macquarie Group that are striving for Lloyds' core operations, Macquarie is the only group also gunning for the Murray Portfolio. After narrowly missing out on Suncorp's (ASX: SUN) $1.6 billion soured loan book, the bank is thought to be fighting hard to acquire the portfolio, which would give it access to $350 million worth of corporate loans.

International corporations such as Oaktree Capital, Apollo Global Management and KKR are also involved in the bidding war for the portfolio.

Foolish takeaway

There are limited growth opportunities in the existing market, and such acquisitions would open up opportunities for growth for the successful bidders. Whilst ANZ (ASX: ANZ) is involved in the bidding war for Lloyds' core operations, it is also heavily focused on growth opportunities in Asia so the acquisition may not be as important as it is to its competitors.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

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