Papua New Guinea’s Independent Consumer and Competition Commission has denied authorisation for Westpac’s sale of its Pacific businesses to Kina Securities.

Westpac announced last December that it would sell Westpac Fiji and its 89.9 per cent stake in Westpac Bank PNG Ltd to PNG’s Kina Securities for around A$420 million.

The transaction requires the approval of the PNG ICCC, which released a draft determination in July saying it proposed to deny authorisation.

Westpac announced yesterday that the ICCC has released its final determination, confirming that it has denied authorisation citing “likely effects on competition.”

Business Advantage PNG reported that the regulator rejected a proposal by Kina to run Westpac PNG as a standalone bank under a new name, East West Commercial Bank, independent of Kina.

ICCC chief executive Paulus Ain said in a statement that the commission did not accept that the proposal would result in separate banks.

Ain said: “Currently the markets are highly concentrated and will remain so long as there are only a few players. The number of commercial banks would be reduced to two with the acquisition.”

The sale would have resulted in the amalgamation of PNG’s number two and number three banks. The country’s biggest bank is Bank South Pacific.

Ain called on Westpac to remain in the PNG market.