New banking initiative for Tasmania

Bendigo Bank and Tasmanian Trustees plan to develop a new banking organisation to operate in Tasmania, in a move that appears to make it less likely that Bendigo will bid for Colonial’s Trust Bank.

The new company will be 50 per cent owned by Bendigo Bank and 50 per cent owned in Tasmania through Tasmanian Trustees and will target the entire Tasmanian retail market. The company will be structured in a way that Tasmanians directly benefit from its profitability.

In a statement announcing the joint venture, Bendigo group managing director Rob Hunt left open the possibility Bendigo could bid for Trust Bank of Tasmania if Commonwealth Bank was forced to divest by the competition regulator over market domination concerns.

The Australian Competition and Consumer Commission decision on the CBA and Colonial merger is expected in early May.

The new company will offer all banking services and will look to establish retail offices in key centres across the state. A range of options, including Community Banks, will be employed to service smaller communities across the State.

It is expected that the new company will commence operations in the new financial year and will provide a positive return on equity in its first year.

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