By Danny John
WESTPAC is to move quickly to take control of St George Bank and begin a three-year strategy to strip as much as $2.7 billion in costs from the combined operations of the companies after yesterday's overwhelming vote by the Dragon's shareholders in favour of the merger.
An announcement on management appointments and the way St George will be run as a separate operation within the bigger group is expected soon, as Westpac's chief executive, Gail Kelly, seeks to capitalise on the end of a seven-month bidding process.
St George chief executive, Paul Fegan, is set to leave the bank he has run for 12 months after Mrs Kelly's shift to Westpac. Dragon insiders, including Bank SA boss Rob Chapman, finance director Michael Cameron and retail banking boss Les Matheson, are among the favourites to replace him. The latter two are relative newcomers to St George, but have established themselves as potential new divisional bosses to manage what will be a smaller business under its new owner.
Westpac, which takes formal control of St George on December 1, has committed to keeping the Dragon brand and name and its 400 branches - including Bank SA outlets in South Australia - and its ATM network.
Savings equivalent to a quarter of St George's cost base are expected to start flowing within the first few months.
The Finance Sector Union yesterday forecast that as many as 5000 jobs could eventually go, providing ammunition for critics of the deal at yesterday's extraordinary general meeting.
St George chairman John Curtis was forced to defend the transaction after a succession of speakers urged rejection of the $16 billion proposal on the grounds that the bank's identity and its reputation for customer service would eventually disappear. He admitted there would be an unspecified number of job losses, particularly among back-office processing staff, and was unable to give an assurance that St George's main corporate centre in Kogarah would avoid big cuts.
About 900 mainly retail shareholders attended the meeting at the Sydney Convention Centre to vote on the 1-for-1.31 share swap terms. Pre-polling indicated that just over half of St George's 566 million shares in issue - 278.7 million shares - were pledged in favour of the merger and 14 million against.
That represented support of 94.3 per cent for the deal which comfortably surpassed the 75 per cent minimum required under the scheme of arrangement proposal for the merger to proceed.