St.George Bank and Foodstuffs New Zealand today announced the sale of Superbank's residential mortgage lending portfolio to GE Money.
Superbank is the joint venture between St.George Bank and Foodstuffs and provides phone and Internet banking to the New Zealand market. The terms of the sale are confidential. However the sale is not material to St.George and will not impact St.George Bank's earnings per share targets for 2006 and 2007 previously announced to the market.
Since Superbank's launch in February 2003, market conditions have changed and marginsin mainstream residential lending in New Zealand have become extremely competitive.Given these factors, both companies had reviewed their strategic positions and examined a range of opportunities for Superbank. Following this review and discussions with several parties, St.George Bank identified its investment in Superbank as non-core and St.George Bank and Foodstuffs decided to sell the mortgage portfolio.
The sale of the mortgage portfolio is effective from August 3 2006.
In addition, Superbank has entered into an agreement with Kiwibank to provide Superbank's deposit customers with a convenient transfer of their SuperSaver account to Kiwibank's esavings product, Online Call. Deposit customers who do not wish to take up this offer will continue to earn interest on their Superbank SuperSaver account until 25 September 2006, at which time the deposit and accrued interest will then be repaid to them in full.