National Bank to buy Countrywide

The National Bank has announced it has reached agreement in principle to buy Countrywide Bank from Bank of Scotland.

Tuesday, July 28th 1998, 12:00AM

The National Bank has announced it has reached agreement in principle to buy Countrywide Bank from Bank of Scotland.
Details of the acquisition are scarce at present as the National Bank, which is owned by British-based Lloyds TSB Group, is currently doing due diligence.
However, further rationalisation of the banking industry has long been mooted because of competitive pressures, and the belief New Zealand is "over-banked".
On the funds management side of the business both fit into the small to middle-size category.

Countrywide has been using a model that is used by other banks, such as ANZ, where it has a force of salaried advisors who work within the branch network and sell Countrywide branded funds.
Currently it has six advisers who work throughout the 68 branch network, and who help the bank's sales consultants and mobile sales force. Its key strengths have been distribution and brand name.
National Bank doesn't leverage off its branch network to sell managed funds. While it was once the dominant player in funds management, its market share has been severely eroded and it has experienced numerous consecutive quarters of fund outflows.
Late last year National Bank sold its funds management arm, Southpac, to AMP Asset Management.
This latest acquisition is likely to give Countrywide access to AMPAM's significant funds management capabilities.
The purchase comes at an interesting time for Countrywide as it is currently going through a total review of its funds management and advisory businesses.
Chief manager insurance and savings Rob Wood says the bank would like to be much more innovative with its product range.
"I can see a great need for products which aren't necessarily just unit trusts," he says.
While it was one of the early players into this market, there has been a feeling within the bank that this area has been overlooked during a period of rapid expansion.
Countrywide is looking to put more emphasis on this area of business and is currently reviewing its funds (including changing some managers) as well as the way it handles the administrative side of this business.
Paul Lyons (who has worked with EquitiLink and Southpac) has recently been appointed as senior manager for sales and marketing at Countrywide.

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