Amendments to update Bankwest legislation

• Legislation to be introduced into State Parliament tomorrow (Wednesday) to enable Bankwest to comply with federal policy

• Key provisions ensuring Bankwest's continued commitment to WA

The State Government will tomorrow introduce legislation securing and strengthening Bankwest's financial and operational commitments to Western Australia.

Treasurer Christian Porter announced the commitments as part of a legislative package designed to enable Bankwest and the Commonwealth Bank (CBA) to comply with federal regulations requiring them to operate under a single banking licence.

Mr Porter said the Australian Prudential Regulation Authority required Bankwest (which has been owned by CBA since 2008) to cease operating as a separate company and operate under the same banking licence as CBA, or raise funds under its own Authorised Deposit-taking Institution (ADI) licence.

He said any change to allow Bankwest to operate under the CBA's ADI licence meant amendments had to be made to the Bank of Western Australia Act 1995 in State Parliament.

If amendments were not made there would be costs to Bankwest customers because Bankwest would be forced to raise funds more expensively and separately to the CBA.

"Given the potential impact on the Western Australian community and small businesses, the Government has to make the necessary minor changes to the legislation," Mr Porter said.

The Treasurer said key commitments already in the existing legislation would be maintained and updated to reflect Bankwest's new corporate structure, including continuing to carry on the type and scale of Bankwest's business at June 2011 levels and keeping the location of the head office and management in WA.

The legislation also means that, for a period of at least five years, Bankwest will be required to:

• maintain a specified minimum number of branches, business centres etc in WA, with no closure of regional branches except for amalgamations or relocations in a local area

• maintain four specified senior officers, in addition to the managing director, in WA

• maintain Bankwest sponsorship and community support activities in the State at no less than current levels.

"These additional commitments go well beyond the provisions of the 1995 Act and are a good outcome for the community in Western Australia. Further, these undertakings are backed by specific enforcement provisions with significant monetary penalties if they are not complied with," Mr Porter said.

      Fact File

• The four specified senior officers are chief information officer, chief financial officer, head of human resources and chief risk officer

• Bankwest is required to provide an annual certificate confirming compliance

Treasurer's office - 6552 5600