From Matangi Tonga Magazine Vol. 17, no. 2, August 2002.

Tonga’s 28 year old Bank of Tonga was renamed Westpac-Bank of Tonga after the Tongan Parliament amended the Bank of Tonga Act on July 15.

Brian Harris, the general manager of the bank, said that it was important for Westpac to publicise the fact that it is the major shareholder in the Bank of Tonga. By featuring Westpac in the name, Brian said it would further enhance the global credibility of the bank, because Westpac was one of the top four banks in Australia with a world-wide network.

Westpac Banking Corporation increased its shares in the Bank of Tonga from 30 per cent to 60 per cent on 28 December 2000 when it bought shares of the Bank of Hawaii for $9 million pa‘anga. Brian said that even though Westpac held 60 per cent and the Government of Tonga 40 per cent, the two shareholders agreed that the Government of Tonga might buy back nine per cent from Westpac whenever it wanted to. Brian said that Westpac was the major shareholder in a number of banks in other Pacific island countries, but with those governments holding only minor shares.

Electronic Banking

Brian said that Westpac had been directly involved in the administration of the Bank after it was established in 1974. It was agreed by the shareholders for Westpac to provide the banking system support, the key expatriate personnel, the key training material for local personnel, the guidance in terms of credit policy, and the guidance in terms of operation policy. “So even though the share holding is 60-40, the bank has been run as a 100 per cent Westpac management entity and Bank of Tonga pays Westpac a management fee for that.”

Brian said that since Westpac became the major shareholder in 2000 they had been following a strategic plan to introduce a system of electronic banking to Tonga, and the plan now was to invest $3 million and introduce a new banking system in November.

“That will give us the ability to offer automatic teller machines access, EFTPOS access, internet banking, and it will bring us to the latest technology available in banking.

“That investment would not have been possible if we still had the Bank of Hawaii as shareholder. When you have two banks holding minority shares they both debate which system to put in and why to invest capital. Now it is easier for Westpac to make a technology decision.”

The new system would enable Westpac Bank of Tonga to be part of a regional banking network and it would open up the opportunity for Tongan staff to go and work in other banks in the region, said Brian, who added that those who would like to take advantage of the opportunity wouldd advance and the others would be left behind and may have to go home.